The online learning company Chegg is cutting almost half of its workforce. AI disruption forces this drastic restructuring of its business. The company will eliminate forty-five percent of its staff. This decision affects approximately three hundred eighty-eight employees. Consequently, the firm aims to reduce its operational costs significantly. The layoffs are a direct response to falling revenue and web traffic.
Chegg explicitly blamed changing technology for its struggles. AI disruption forces a decline in its core business model. The rise of generative AI tools is a primary factor. Additionally, changes in Google search patterns have reduced traffic. These combined pressures have created a severe financial challenge. The company’s executive chairman is now returning as CEO. He will lead the pivot toward a new business strategy.
The restructuring plan includes a major strategic shift. Chegg will focus more on the business-to-business market. It specifically targets the large corporate skilling sector. This move is intended to stabilize the company’s future. The layoffs will generate substantial cost savings next year. However, the company will face significant severance charges now. It will provide more details during its upcoming earnings call.
This situation highlights a broader trend across industries. AI disruption forces many companies to adapt quickly. Chegg’s experience shows how profoundly AI can affect a business. The education technology sector is undergoing a significant transformation. Other firms may soon face similar difficult decisions. The company remains an independent public entity for now. Its leadership expressed confidence about exploring future growth paths.
