Chegg to lay off 22% of workforce as AI tools shake up edtech industry

Chegg volition besides unopen its U.S. and Canada offices by the extremity of the twelvemonth [File] | Photo Credit: REUTERS

Chegg said connected Monday it would laic disconnected astir 22% of its workforce, oregon 248 employees, to chopped costs and streamline its operations arsenic students progressively crook to AI-powered tools specified arsenic ChatGPT implicit accepted edtech platforms. The company, an online acquisition steadfast that offers textbook rentals, homework assistance and tutoring, has been grappling with a diminution successful web postulation for months and warned that the inclination would apt worsen earlier improving.

Google's enlargement of AI Overviews is keeping web postulation confined wrong its hunt ecosystem portion gradually shifting searches to its Gemini AI platform, Chegg said, adding that different AI companies including OpenAI and Anthropic were courting academics with escaped entree to subscriptions.

As portion of the restructuring announced connected Monday, Chegg volition besides unopen its U.S. and Canada offices by the extremity of the twelvemonth and purpose to trim its marketing, merchandise improvement efforts and wide and administrative expenses.

The bulk of the resulting charges of $34 cardinal to $38 cardinal are expected to beryllium incurred successful the 2nd and 3rd quarters.

Chegg expects outgo savings of betwixt $45 and $55 cardinal successful 2025 and $100 to $110 cardinal successful 2026 owed to the restructuring.

It besides reported first-quarter results connected Monday, saying subscribers declined 31% successful the play to 3.2 million. Revenue declined 30% to $121 million, arsenic its subscription services gross fell by astir a 3rd to $108 million.

In February, Chegg sued Google saying Google's net hunt motor was eroding request for archetypal content and undermining publishers' quality to vie with its artificial intelligence-generated overviews, thereby causing a driblet successful visitors and subscribers.

Chegg had 1,271 employees arsenic of December 31.

Published - May 13, 2025 02:57 p.m. IST