Chegg announces the move to reduce the workforce by 22%, while students turn to AI
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- Chegg saw sales fall from 30% on an annual basis in Q1 2025
- 248 employees (22%) will lose their jobs this year
- Other cost -saving measures are confirmed
Online learning platform Chegg has announced plans to dismiss approximately 22% of his workforce – 248 employees – to save costs and to streamline activities.
The news was bundled with the announcement of a less than ideal decrease of 30% in quarterly sales, with the company generating $ 121.4 million in its first tax quarter.
Chegg has seen falling web traffic for months, and it is expected that this trend could even deteriorate in the short term, hence the decision to take drastic measures and to deny more than a fifth of his current workforce.
Chegg blames AI for the decrease in income, fired
In his income afterCHEGG CEO Nathan Schultz blamed the implementation and expansion of Google of AI overviews for his continuous dominance in the search market (something that the US Department of Justice has already complained about) and the interest in his Gemini Ai chatbot.
Schultz also noticed that Openi has launched free subscriptions to Chatgpt Plus for students, where anthropic also follows a similar path, which means that the company of Chegg is at risk.
Despite the announcement of two restructuring in 2024, the company is forced to take things further by closing physical offices in the US and Canada by the end of 2025. The company will also “limit it [its] Upper funnel marketing, reducing the efforts of new product development and ultimately cutting [its] General and administrative costs. “
The 248 risks are mainly ‘concentrated in the US and Canada’, where Chegg study and business services see the biggest dismissals of 66%.
The company hopes to save an extra $ 45-55 million extra in 2025 on top of the $ 120 million in savings that it predicts from its 2024 restructuring efforts. Further savings of $ 100-110 million, affected by the most recent cost-saving events, are expected before 2026.
CFO David Longo added: “Looking ahead, the challenges in the industry remain a remarkable decrease in traffic and takeovers of subscribers.”
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