"Chegg is slashing about 45% of its workforce-388 roles-as the company says the "new realities of AI" and a sharp drop in Google-driven traffic have significantly reduced its student traffic and revenue. The edtech company will eliminate 388 positions globally, about 45% of its staff, in a major restructuring aimed at cutting costs and reshaping operations for an AI-first market environment. Chegg attributed the cuts to generative AI's rapid adoption among students and reduced Google referrals to content publishers, which it said have materially eroded demand for its services."
"Chegg's leadership has long acknowledged AI's disruptive force: in July 2023, Rosensweig told a Fortune audience he had become a "poster child" for the disruption of AI after Chegg's stock plunged 48% when it warned that ChatGPT was impacting new customer growth. In that Fortune discussion at the Brainstorm Tech conference, he outlined "CheggMate," a generative AI learning assistant trained on the company's large corpus of verified Q&A, pitching a personalized, trustworthy tutor that adapts to a student's needs and context."
Chegg will eliminate 388 positions globally, about 45% of its staff, in a restructuring to cut costs and shift to an AI-first operating model. The company cited rapid generative AI adoption among students and a sharp drop in Google-driven referrals as factors that materially eroded demand and revenue. Chegg expects restructuring charges of roughly $15 to $19 million through early 2026 and plans to reduce 2026 non-GAAP expenses by about $100 to $110 million. Executive chairman Dan Rosensweig will resume the CEO role while Nathan Schultz becomes an executive adviser. The company faces pressure from AI-native competitors and changing student behaviors and previously promoted an AI assistant called CheggMate trained on its verified Q&A corpus.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]