Chegg, once thriving during the pandemic, now struggles amid the rise of AI technologies, leading to significant layoffs and financial losses. The company's recent quarterly results showed a steep decline in revenue and subscriptions, prompting an announcement of a 248-worker layoff, totaling over 20% of its workforce. CEO Nathan Schultz has attributed the downturn to the competition from AI tools like ChatGPT and Google's AI Overviews, which divert student traffic away from Chegg's platforms. Schultz warns that business conditions may worsen before improving as Chegg plans to move to a smaller office and exit its current lease early.
On Monday, Chegg announced its third major layoff in 11 months, with a 248-worker cut that amounts to more than a fifth of its current workforce.
Schultz predicted, 'business trends will worsen before they get better,' lamenting that Google's expansion of AI Overviews 'continues to keep web traffic captive in the Google search experience.'
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