Chegg To Lay Off 22% of Workforce as AI Tools Shake Up Edtech Industry

Chegg said on Monday it would lay off about 22% of its workforce, or 248 employees, to cut costs and streamline its operations as students increasingly turn to AI-powered tools such as ChatGPT over traditional edtech platforms. From a report: The company, an online education firm that offers textbook rentals, homework help and tutoring, has been grappling with a decline in web traffic for months and warned that the trend would likely worsen before improving.

Google's expansion of AI Overviews is keeping web traffic confined within its search ecosystem while gradually shifting searches to its Gemini AI platform, Chegg said, adding that other AI companies including OpenAI and Anthropic were courting academics with free access to subscriptions. As part of the restructuring announced on Monday, Chegg will also shut its U.S. and Canada offices by the end of the year and aim to reduce its marketing, product development efforts and general and administrative expenses.

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