The educational technology company Chegg, known for offering students homework help, announced on Tuesday it will cut nearly a quarter of its workforce in an effort to change focus as it faces growing competition from artificial intelligence (AI) tools.
The cuts would affect 441 employees globally, the company said in a letter to shareholders. CEO Nathan Schultz cited the need for Chegg to become a “leaner, more efficient, uncomplicated and quicker-moving company.”
“Due to the increasing demands on the modern student, as well as the rapid proliferation of generic AI tools, the need to broaden beyond academic solutions is more important for us than ever before,” Schultz wrote. “The combination of learning support services with broader tools for student success is needed, differentiated and defensible.”
The news comes after several years of ups-and-downs at Chegg. In 2022, the company was accused of misleading investors about its financial growth in 2020, though some experts believed the spike was due to students cheating in courses that moved online. The allegations followed September 2021 accusations by textbook publishing giant Pearson, which claimed Chegg infringed on Pearson’s copyright by providing answers to end-of-chapter questions in Pearson textbooks.
Chegg said it plans to focus on reaching students in high school and earlier in college. It will also place more attention on international students—the company said it will apply more resources toward six unnamed countries in the coming year.
Schultz also said Chegg will go beyond the typical online educational support model it previously had, and focus on “360 degrees” of individual support, including financial literacy, early career learning and community.
He added the company expects to save roughly $45 million in the coming year from the employee cuts, along with selling two of its international offices and other cost saving measures.
