For years, Figma users have handled an awkward truth of modern design work: projects grow, files multiply, and flat folder structures eventually become a mess. The company is now addressing that problem with nested folders, a seemingly simple addition that has been one of its most requested organizational features.

The timing is notable. Nested folders are arriving not as a nostalgic return to old-school file management, but as part of Figma’s broader push toward AI-native product development. In other words, Figma is making the case that AI does not make organization irrelevant. If anything, it makes structure more important.

A design team can create more material than ever: explorations, prototypes, copy variants, developer handoff files, research boards, libraries, presentations, and now AI-generated experiments. The result is a familiar digital sprawl. When every project sits at the same level inside a workspace, even a reasonably named collection of files begins to feel unmanageable. Nested folders give teams a basic but powerful missing layer: the ability to put folders inside folders and create a hierarchy that reflects how real work is actually organized.

For a design team, that could mean separating a product area into research, active work, archived concepts, design-system updates, and handoff files. For an agency, it could mean grouping projects by client, then campaign, then deliverable. The feature is not flashy, but it deals with the kind of everyday friction that becomes painfully visible only after a workspace has been in use for months or years.

Figma itself describes the feature as a major rethink of the underlying system, rather than a cosmetic update to its file browser. The company says nested folders required changes to the content model, permissions, sharing behavior, administrative controls, and supporting infrastructure. That explanation matters because file organization in a collaborative product is never just about dragging an icon into a new location. A folder can carry access rules, inherit permissions, contain sensitive client material, and sit inside an enterprise governance model.

The tricky part is what happens when those rules overlap. If a designer has editing rights for a parent folder but only view access to a subfolder, the software has to explain that relationship clearly. If a team duplicates, transfers, or shares a folder, it has to preserve the right access model without exposing work to the wrong people. Figma’s product team says it spent significant time working through these edge cases, including how inherited access appears in sharing flows and what happens when that inheritance is broken.

That complexity helps explain why a long-requested feature took time to arrive. But the more revealing part of the story is how Figma says it built it.

From documents to working demos

The nested folders project began with a relatively familiar product-development formula: product managers defined requirements, designers mapped the experience, and engineers started building after the plan felt sufficiently settled. That workflow changed midway through the effort as Figma redirected resources toward AI capabilities and as AI-assisted development made it easier to turn ideas into working software quickly.

Rather than spending weeks debating every requirement in documents, Slack threads, or meetings, the team began treating code as a proposal. Engineers would create pull requests, put rough versions into a staging environment, and let colleagues react to something tangible. The point was not to ship unfinished features indiscriminately. It was to shorten the distance between an idea and a testable version of that idea.

That is one of the more consequential shifts happening inside software teams right now. When writing code becomes faster with AI agents and coding assistants, the bottleneck moves. It is no longer only the engineer’s ability to produce an implementation. It becomes the team’s ability to make good decisions, evaluate trade-offs, understand customers, and converge on the version worth shipping.

Figma engineer Ethan Adams framed the shift bluntly: a working experiment in the real codebase can be more useful than a lengthy requirements document when a team needs to learn quickly. That does not mean product strategy and planning disappear. It means they are increasingly informed by prototypes rather than assumptions.

In the nested folders project, rough code could be merged if it did not break the product, then tested and refined in context. That created a loop where implementation, feedback, and decision-making happened closer together than in a traditional handoff model. For teams accustomed to rigid boundaries between product, design, and engineering, that can be a substantial cultural change.

When roles get blurrier

The traditional software workflow is built around specialization. Product managers define the problem, designers define the experience, engineers build the system, and each group hands work to the next. The model can work well, especially on large and complex products. But it can also create delays and misunderstandings, particularly when every small decision has to travel through a chain of ownership.

Figma’s nested folders team tried something different. Engineers made design calls when they had enough context. The designer made code contributions. The product manager stepped back from some day-to-day execution to focus more heavily on strategy, customer research, and risk.

The goal was not to turn every employee into a generalist. Figma designer Cai Charniga makes that distinction clearly in the company’s account of the work. Designers do not suddenly become engineers because they submit a few pull requests, and engineers do not replace designers because they can make interface adjustments. But giving people enough exposure to adjacent disciplines can improve collaboration and help work move when the designated owner is unavailable.

That difference is important. “AI-native” work does not necessarily mean fewer experts. It may mean experts working with a broader understanding of the systems around them.

A designer who can enter a code environment gains a better feel for implementation constraints. An engineer who understands a design system can make a thoughtful interface change without blocking progress. A product manager who spends less time prescribing every detail can devote more attention to customer needs, rollout risks, and strategic questions that cannot be resolved by a coding agent.

Figma’s team describes this as replacing handoffs with conversations. It is an appealing phrase, but it also captures a practical reality. Handoffs are efficient only when the person receiving the work has all the context they need. In real product development, they often do not. Conversations, prototypes, shared canvases, live reviews, and quick tests can preserve more of that context.

Why folders still matter in an AI era

There is an obvious question hanging over a feature like nested folders: if AI search is getting better, why bother with folders at all?

It is easy to imagine a future where users simply ask an assistant to find “the approved checkout flow from last quarter” or “the accessibility review for the mobile navigation redesign.” Search has already become good enough to reduce the need for perfect naming in many tools. AI agents promise to push that further by interpreting natural-language requests and retrieving relevant work.

But search is only as good as the context available to it.

A flat workspace full of ambiguously named files gives both humans and machines less to work with. A well-structured folder hierarchy adds meaning. It tells a person – and potentially an AI system – which files belong to a client, product area, release, team, or stage of work. It establishes relationships that are difficult to infer from file names alone.

Figma’s product team reached a similar conclusion while considering whether file organization still mattered in an AI-first world. The company said structured folders could give future AI search richer context to retrieve against, especially as people generate and create more material.

That is the larger lesson behind this otherwise ordinary product update. AI is likely to create more content, more versions, more experiments, and more artifacts that need to be understood later. It may reduce the effort required to make work, but it does not eliminate the need to find, govern, share, and trust that work.

In fact, AI may raise the stakes. If a design agent can generate multiple screens, components, or prototypes in minutes, teams will need stronger ways to separate rough explorations from approved work. Otherwise, the speed of creation simply produces a faster route to chaos.

A feature shaped by customers

Figma also says that early customer feedback played a central role in refining nested folders before release. The team recruited early-access participants through events, community groups, and outreach to users who had been vocal about file organization.

That mattered because folder systems look straightforward in clean product demos but behave differently inside established organizations. Real workspaces contain legacy files, inconsistent naming, overlapping teams, old permissions, abandoned initiatives, and processes that have evolved over years. Any attempt to change the organizational model has to account for that reality.

Early users helped Figma identify bugs, test folder behavior in active organizations, fine-tune the experience, and reduce the risks of moving customers to a new content model, according to the company. For a feature tied to permissions and large-scale workspace organization, this kind of testing is not a nice-to-have. It is where many of the important details surface.

The launch is also a reminder that the most valuable software updates are not always the most dramatic. Generative AI features make for eye-catching demos. A nested folder does not. But for teams managing hundreds or thousands of files, better organization can have a compounding effect on daily work. It reduces hunting, clarifies ownership, improves onboarding, and makes it easier to preserve an understandable record of how a project developed.

Figma says nested folders will roll out to all users over several weeks. For many customers, it will look like a small overdue improvement. Underneath, though, it reflects a bigger change in how modern software companies may build products: less linear, more cross-functional, more willing to test through code, and increasingly shaped by the assumption that AI can accelerate making without replacing the need for human judgment.

That may be the real story of nested folders. The feature is about putting order inside a growing pile of files. The way it was made is about putting a new kind of order around the people, tools, and decisions that create them.