When Canva announced a restructuring affecting 1,271 employees, or 22 per cent of its workforce, attention quickly turned to what the company was offering those who would have to leave. For a business that had grown rapidly over thirteen years, the restructuring was significant. But the terms of departure attracted almost as much attention as the decision itself.
At least six months of salary, inclusive of statutory entitlements, regardless of location. Up to twelve months of continued healthcare coverage where applicable. Removal of the one-year equity vesting cliff for recent hires. Career coaching, job-search assistance, LinkedIn Premium and the option to keep company MacBooks. There was also a US$10,000 grant for eligible departing employees interested in starting a business or community project.
The response was largely admiring. Here, the consensus suggested, was how a layoff should be handled.
The admiration is understandable. But it also raises an uncomfortable question. Why has a company accepting responsibility for the consequences of its own restructuring come to seem so exceptional?
“The legal minimum will always be available as an answer. For some companies, it may be all they can afford. For others, it is simply the least they are required to do.”
The floor was never the standard
Employment law establishes a minimum. Notice periods, statutory severance and termination procedures exist to protect employees from arbitrary dismissal. They define what an employer must do, not necessarily everything a responsible employer ought to do.
Somewhere along the way, however, the floor became the benchmark. Organisations that exceed legal requirements are praised for generosity. Those that merely comply are generally considered to have behaved acceptably. The question of what companies owe departing employees beyond what the law requires receives much less attention.
This does not mean every employer can afford generous severance. A struggling business facing insolvency operates under different constraints from a profitable multinational restructuring for strategic reasons. Financial capacity matters. But it should inform the discussion about responsibility, not eliminate it.
The law can establish what is permissible without settling what is fair.
“Employees are encouraged to demonstrate commitment beyond their contractual obligations while employed, yet the company’s obligations at separation may extend no further than the contract and the law.”
The terms of the relationship
When companies recruit, they rarely describe employment as a contractual transaction alone. They speak of partnership, shared purpose, belonging and long-term careers. Employees are encouraged to identify with the organisation’s ambitions, invest in its success and contribute beyond their formal responsibilities.
And many do. They accommodate urgent business demands, acquire new skills, support colleagues through difficult periods and sometimes reorganise their personal lives around professional commitments. The relationship may be contractual in form, but it is sustained by expectations that extend beyond the contract.
When the organisation decides that relationship must end, however, those expectations can become less visible. The discussion narrows to notice periods, statutory entitlements and financial exposure. What was described as a partnership is suddenly assessed through the language of compliance.
The asymmetry is striking. Employees are encouraged to demonstrate commitment beyond their contractual obligations while employed, yet the company’s obligations at separation may extend no further than the contract and the law.
Not every redundancy reflects indifference. But an organisation that has spent years encouraging people to believe they are more than a resource cannot reasonably expect the relationship to become purely transactional when circumstances change.
“A company that has spent years asking its people for commitment, loyalty and discretionary effort must eventually decide how much of that relationship it is prepared to honour when it no longer needs their services.”
When the company makes the decision
The circumstances behind a redundancy should influence how an employer approaches its responsibilities.
Canva has described its restructuring as an effort to simplify its organisation, clarify responsibilities and prepare for future growth. It operates in an industry undergoing significant technological change, although the company has not presented the affected roles as being directly replaced by AI.
The employees affected are not necessarily leaving because they failed to perform. Their roles are changing or disappearing because the organisation has decided to operate differently.
Companies must retain the freedom to make such decisions. Restructuring can be commercially justified, even essential. But commercial justification does not settle the question of who should bear the consequences.
When a business is failing, its ability to support departing employees may be severely constrained. When a financially healthy organisation restructures to improve efficiency or pursue new opportunities, it has greater scope to share the costs of that transition.
The company expects to benefit from its strategic choices. Employees whose roles disappear may lose income, security and career momentum despite having performed the work for which they were hired.
Going beyond the legal minimum in such circumstances is not simply generosity. It is an acknowledgment that the consequences of corporate decisions should not fall entirely on the people whose jobs those decisions make unnecessary.
The India dimension
One detail in Canva’s announcement deserves particular attention: the commitment to a minimum of six months’ salary regardless of location.
Global companies often manage redundancies according to local legal requirements. Consequently, employees contributing to the same organisation may receive very different support depending on where they work.
These comparisons are not straightforward. Labour protections, healthcare systems and social-security benefits vary considerably between countries. Identical severance packages do not necessarily produce equivalent outcomes.
Nevertheless, Canva’s approach raises an important question. Should the minimum support offered to departing employees depend entirely on the labour laws of the country where they happen to work?
The value an employee creates for a global organisation is not determined by their location. Indian professionals develop international products, manage global operations and serve customers across markets. Their contribution may be comparable to that of colleagues elsewhere, even when their legal protections differ.
A common global standard need not mean identical packages everywhere. But multinational organisations could establish a consistent minimum standard of dignity and transition support rather than allowing local statutory requirements to define the limits of their responsibility.
What the praise reveals
That Canva’s package has attracted widespread admiration is revealing. It suggests how modest expectations surrounding corporate exits have become. Meaningful financial support, healthcare continuity and assistance with finding another opportunity are regarded as exceptional rather than as standards financially capable employers might reasonably aspire to meet.
The costs are substantial and should not be dismissed. Companies must balance their responsibilities to departing employees with obligations to shareholders, customers and those who remain.
But the question is whether organisations recognise that employment creates obligations extending beyond the point at which a particular role is no longer required.
There is also a longer-term consequence. Employees who survive a restructuring watch how their departing colleagues are treated. They draw conclusions about the meaning of loyalty, the credibility of leadership and whether the company’s stated values survive difficult decisions.
Generous severance cannot make every restructuring fair. Employees may still question whether job losses were necessary, whether alternatives were explored or whether the process was transparent. Financial support does not absolve a company of those responsibilities.
Yet how an organisation treats people when it no longer needs their services remains one of the clearest tests of its character.
Beyond compliance
As artificial intelligence and other technological changes reshape industries, more organisations will reconsider the roles and skills they require. Some financially healthy companies will eliminate jobs as they redesign their businesses around new capabilities.
Those decisions will raise questions that go beyond lawful termination. If an organisation benefits from a strategic change that makes certain roles unnecessary, how much of the transition cost should employees bear? And should the answer depend solely on what employment law permits?
There can be no universal severance formula. Financial capacity, the reasons for restructuring, employees’ tenure and the support available to them must all matter. But the absence of a universal formula is no justification for treating compliance as the final measure of responsibility.
The legal minimum will always be available as an answer. For some companies, it may be all they can afford. For others, it is simply the least they are required to do.
A company that has spent years asking its people for commitment, loyalty and discretionary effort must eventually decide how much of that relationship it is prepared to honour when it no longer needs their services.
That decision may reveal more about its culture than anything it said while recruiting them.