Chegg on Monday introduced plans to slash 22% of its workforce as synthetic intelligence bots steal college students away from its examine and homework assist instruments.
The net platform, which provides textbook leases and step-by-step homework tutorials, mentioned it has been struggling as Google’s AI Overviews squash internet visitors, and companies like OpenAI and Anthropic supply reductions and offers to school college students on their language fashions.
“We believe the macroeconomic trends will continue to put pressure on our company and business trends will worsen before they get better,” CEO Nathan Schultz mentioned in a press launch.
“As part of this, we regrettably will be parting ways with approximately 22% or 248 of our talented team members, which is a challenging decision and one I’m saddened by,” he added.
Chegg additionally plans to shut its bodily places of work within the US and Canada by the top of the yr, in addition to in the reduction of on new product growth and cut back administrative prices.
These cost-cutting measures will save Chegg roughly $45 million to $55 million in 2025, and $100 million to $110 million in 2026, the corporate mentioned.
It expects to incur restructuring costs of $34 million to $38 million, largely from severance funds.
Shares in Chegg jumped 4.8% on Monday.
Chegg disclosed its subscriber rely declined 31%, to three.2 million, as the corporate reported its first-quarter outcomes on Monday.
Income plunged 30% to $121 million, as income from subscription providers fell by almost a 3rd to $108 million.
It suffered a web lack of $17.5 million in the identical interval.
In February, Chegg filed a federal antitrust lawsuit towards Google, claiming the search engine’s AI summaries, which populate on the high of the outcomes web page, have decimated its website visitors and income.
Google has argued that its AI summaries ship internet visitors to “a greater diversity of sites.”
