Speaking at the Morgan Stanley Australia Summit, Mr Obrecht said businesses had to be vigilant about sacking poorly performing staff even when the macroeconomic environment was good.
“I think a lot of companies – and this sort of has expressed itself through the big cutbacks in tech companies – don’t think with a wartime mentality in peacetime,” Mr Obrecht said.
When companies were hiring large numbers of new staff, he said, poor performers tended to be left alone. In leaner times, that necessitated deeper lay-offs.
No change in approach
The world’s largest technology companies, including Google, Meta and Amazon, did major rounds of lay-offs as interest rates rose and the need for AI spending increased between 2021 and 2023. Canva did not.
“You need to constantly be looking at low performers and actively managing those people out of your company in order to keep that performance bar high,” Mr Obrecht said.
He said Canva, unlike General Electric under its famed former chief executive Jack Welch, did not stack rank its employees with percentages marked out for each performance category. And he said there had been no change in its approach over the years. “It’s always been part of our philosophy,” Mr Obrecht said.
Mr Obrecht also gave short shrift to the advice that he received from venture capitalists during the boom years. “In 2021, investors were saying, take on more money,” Mr Obrecht recalled. “You should be spending like another billion dollars on marketing, blah, blah, blah.”
Canva dismissed that advice, Mr Obrecht said. “It turns out [that you should] just use common sense. Don’t burn money on shit. Make sure you’ve got profitable growth.”
Mr Obrecht said most Australian firms understood that proposition but in the United States, self-congratulatory industry messages online had undermined logic. He refused to name the investors who had given Canva poor advice.
His derision for some parts of the US technology sector has not stopped Canva repeatedly taking American money. One of its pivotal early investors was Bill Tai, a well-connected veteran venture capitalist. The giant fund manager Franklin Templeton is on its shareholder register, as is Coatue Management, a fund that has cash from a host of American technology luminaries.