Online education platform, Chegg announced a major restructuring. The company has revealed plans to lay off about 45 per cent of its staff — roughly 388 employees — as it struggles to adapt to the rapid rise of artificial intelligence and shrinking web traffic from search engines.
Founded two decades ago, Chegg grew popular for offering textbook rentals, tutoring, and homework assistance. However, the company’s fortunes have taken a sharp turn since the emergence of generative AI tools such as ChatGPT, which many students now rely on for instant study support. The company claims that reduced visibility on Google has further hurt its business, as AI-driven summaries in search results divert users away from Chegg’s platform.
The restructuring marks Chegg’s second major round of layoffs this year. In May, it had already cut 22 per cent of its workforce, citing similar pressures from AI adoption. The company said it is now revamping how its learning products operate, with greater emphasis on integrating artificial intelligence into its offerings.
Chegg’s market performance mirrors its operational struggles. After going public in 2013, its stock peaked during the pandemic-driven boom in online learning, reaching $113.51 in February 2021. Since then, the value has plunged by nearly 99 per cent, bringing its market capitalisation down from $14.7 billion to about $156 million.
In a leadership shake-up, Dan Rosensweig has returned as CEO, replacing Nathan Schultz, who will continue as an executive advisor. Rosensweig previously led Chegg from 2010 until stepping down in April 2024.
The company also confirmed it will remain independent after completing a strategic review. Chegg was earlier at risk of delisting from the New York Stock Exchange but regained compliance when its stock rebounded above $1 in May.
