Chegg Slashes 22% of Workforce as AI Chatbots Hijack Education Tech Market
Education has officially entered the AI era — and CheggCHGG is getting schooled in the harsh lessons of disruption. The once-thriving education technology organization announced its third major layoff in less than a year, slashing 248 positions — representing 22% of its total staff. This latest reduction comes as students increasingly abandon traditional homework help platforms for AI alternatives like ChatGPT and Google’s AI Overviews.
- Chegg’s first-quarter results revealed a 30% revenue decline to $121M, while subscriptions fell 31% — stark evidence of AI’s impact on its core business model.
- With the company’s market valuation down 99% from the pandemic’s peak, CEO Nathan Schultz warned investors that “business trends will worsen before they get better.”
The final lesson: Chegg isn’t surrendering quietly to the AI revolution. In February, it sued Google, claiming the AI Overviews feature is “parasitic” and leverages “monopoly power” to keep users within Google’s ecosystem instead of directing traffic to Chegg’s site. Beyond the layoffs, Chegg is taking drastic cost-cutting measures — including vacating its headquarters by year-end and targeting up to $55M and $110M in savings for 2025 and 2026, respectively. As AI continues to reshape education, Chegg’s rapid decline is a cautionary tale for firms slow to adapt in an era of accelerating tech disruption.