Edtech giant Chegg is slashing jobs. On Monday, it announced cutting 388 roles worldwide. That’s about 45% of its staff. The move is meant to cut costs and streamline operations amid a tough business climate.
Chegg’s core problem? The rise of AI tools like ChatGPT. These free AI helpers are changing how students get homework help. Students no longer need to pay for Chegg’s services when AI can do the job for free. Chegg says AI realities and less Google traffic have caused a big drop in its visitors and revenue.
The company’s stock has taken a nosedive. It peaked at $113 in early 2021 but now trades near just $1. That’s a 99% wipeout. Market value went from $14.7 billion to $156 million—a massive fall.
Chegg’s CEO has changed too. Dan Rosenweig is back as CEO, taking over immediately. He led Chegg from 2010 to mid-2024. Nathan Schultz, who took over recently, resigned but stays as an executive adviser. The leadership shuffle shows the company is in a serious crisis.
Chegg was based in Santa Clara, California, with 1,271 employees as of the end of 2024. This job cut will impact nearly half of them. The company expects to spend $15 to $19 million on restructuring costs by early 2026, plus another $12 to $16 million later that year.
The layoffs come after a previous cut of 22% in May, also blamed on AI’s impact. Chegg closed some offices in the US and Canada and cut marketing and product costs earlier this year.
Chegg has also been fighting back legally. It sued Google in February, claiming AI summaries in search results stole its web traffic and hurt sales. When Google shows answers directly, students don’t click through to Chegg.
Amid the chaos, Chegg is changing its focus. It plans to pivot from traditional homework help to a skilling market. The means is offering professional language learning, workplace skills and AI courses. These new areas aim for $70 million in revenue by 2025 and growth afterward.
Despite struggles, Chegg will remain an independent company after a strategic review. But with AI reshaping education fast, Chegg is fighting to survive and stay relevant.
The story of Chegg is a wild ride. Once an Edtech star during the pandemic, now hit hard by AI disruption. Job cuts, leadership change and a pivot to new markets mark a dramatic comeback attempt. Students may have ChatGPT for free, but Chegg is betting on new skills to turn around its future. This saga is far from over. The EDtech battle just got real.
Edtech Giant Chegg Cuts Nearly Half Its Workforce Amid AI Surge
