"In February 2021, Chegg's stock traded at $115 with a market cap of $14.7 billion, driven by record demand for online education during the COVID-19 pandemic."
"AI tools like ChatGPT and Claude offered instant answers for free, making Chegg obsolete and leading to a significant decline in its market position."
"The company attempted to counteract its decline with CheggMate, an AI chatbot trained on its proprietary homework database, but this effort ultimately failed."
"Chegg laid off 248 employees in May 2025 and 388 employees in October 2025, blaming the 'new realities of AI' for its struggles."
Chegg, once valued at $14.7 billion, faced a dramatic decline as generative AI tools like ChatGPT emerged, offering free homework help. Despite attempts to adapt with CheggMate, an AI chatbot, the company struggled to compete. Significant layoffs occurred in 2025, with 248 employees in May and 388 in October, reflecting the impact of AI on its business model. Currently, Chegg's stock is valued at $1.02, with a market cap of $114.59 million, and it faces challenges to remain listed on the New York Stock Exchange.
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