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Chegg Inc., a Santa Clara-based on-line studying platform, mentioned Monday it can lower about 45% of its workforce – roughly 388 staff – because it confronts what it calls “the brand new realities of AI and decreased visitors from Google to content material publishers.”
In its official assertion, the corporate mentioned the restructuring plan displays “a big decline in Chegg’s visitors and income,” which it has attributed to shifts in generative AI and altering search patterns.
Chegg mentioned the layoffs will cut back cut back 2026 non-GAAP bills by about $100 million to $110 million and lead to fees of $15 million to $19 million, largely in money severance.
It expects to supply extra info throughout its third-quarter earnings name on Nov. 10.
On this photograph illustration a Chegg, Inc. emblem of a U.S. schooling know-how firm is seen on a smartphone. (Pavlo Gonchar/SOPA Photos/LightRocket by way of Getty Photos / Getty Photos)
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Govt Chairman Dan Rosensweig will return as president and chief government officer, efficient instantly, as a part of the overhaul. Nathan Schultz, who succeeded Rosensweig in 2024, will step down and function an government advisor to Rosensweig and the board.
“As I return to the CEO function, I’m assured Chegg has a vivid future, and I look ahead to exploring all paths to drive progress and improve shareholder worth,” Rosensweig mentioned within the launch.
The corporate confirmed it can stay an impartial public firm after months of reviewing choices, together with a sale or going non-public.
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Google AI on a cell phone. (Jonathan Raa/NurPhoto by way of Getty Photos / Getty Photos)
“After considerate consideration of a number of proposals, the Board of Administrators unanimously decided that remaining an impartial public firm gives one of the best alternative to maximise long-term shareholder worth,” the corporate mentioned.
The corporate mentioned AI adoption and decreased Google search visitors have prompted a big drop in visitors and income.
Chegg headquarters in Santa Clara, California, U.S. (David Paul Morris/Bloomberg by way of Getty Photos / Getty Photos)
“The brand new realities of AI and decreased visitors from Google to content material publishers have led to a big decline in Chegg’s visitors and income,” the corporate said.
To adapt, Chegg mentioned it can streamline operations to decrease prices and make investments extra in what it calls its fastest-growing space – the $40 billion-plus ‘skilling market.’”
Google emblem and AI Synthetic Intelligence phrases are seen on this illustration. (REUTERS/Dado Ruvic/Illustration/File Picture / Reuters Images)
Chegg mentioned it plans to increase past conventional research assist right into a “skilling-focused business-to-business group” providing applications in language studying, office readiness and AI-related abilities.
These new segments are projected to usher in about $70 million in 2025 income and obtain double-digit progress in 2026.
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Chegg reiterated its third-quarter steerage and cautioned buyers about “dangers and uncertainties” tied to the evolving AI panorama – together with “the results of AI know-how on our enterprise and the economic system usually” and its means to “stabilize the enterprise by attracting new learners” amid visitors declines.