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12h ago

Chegg Cuts 22% of Workforce and Closes Offices as AI Competition Intensifies

The education technology firm lays off 248 employees, shuts U.S. and Canada offices, and battles declining revenue while suing Google over AI-driven content practices.

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Overview

  • Chegg has announced its third major layoff in 11 months, reducing its workforce by 22%, or 248 employees, to address declining revenue and increased competition from AI tools.
  • The company will close its U.S. and Canada offices by the end of 2025 as part of a restructuring plan aimed at reducing costs and realigning operations.
  • Chegg expects restructuring charges of $34–$38 million in the second and third quarters of 2025 but anticipates saving $45–$55 million this year and $100–$110 million in 2026.
  • In Q1 2025, Chegg reported a 31% drop in subscribers to 3.2 million and a 30% decline in revenue to $121 million, driven by students shifting to AI-powered alternatives like ChatGPT.
  • The company continues its antitrust lawsuit against Google, alleging that Google's AI-generated Overviews unfairly divert web traffic away from Chegg's platform.