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Chegg Inc., a Santa Clara-based online learning platform, said Monday it will cut about 45% of its workforce — roughly 388 employees — as it faces what it calls “the new realities of AI and less traffic from Google to content publishers.”
In its official statement, the company said the restructuring plan “reflects a significant decline in Chegg’s traffic and revenues,” which it attributed to shifts in generative AI and changing search patterns.
Chegg said the layoffs will reduce non-GAAP expenses for 2026 by approximately $100 million to $110 million and result in costs of $15 million to $19 million, primarily in cash severance payments.
It expects to provide more information during its third-quarter earnings call on November 10.
In this photo illustration, a Chegg, Inc. logo of an American education technology company is seen on a smartphone. (Pavlo Gonchar/SOPA Images/LightRocket via Getty Images/Getty Images)
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Executive Chairman Dan Rosensweig will return as president and general managerwith immediate effect, as part of the overhaul. Nathan Schultz, who succeeded Rosensweig in 2024, will step down and serve as executive advisor to Rosensweig and the board.
“As I return to the role of CEO, I am confident that Chegg has a bright future, and I look forward to exploring all avenues to drive growth and enhance shareholder value,” Rosensweig said in the press release.
The company confirmed that it has a independent public company after months of reviewing options, including a sale or going private.
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Google AI on a mobile phone. (Jonathan Raa/NurPhoto via Getty Images / Getty Images)
“After careful consideration of several proposals, the Board of Directors has unanimously decided that remaining an independent listed company offers the best opportunity to maximize long-term shareholder value,” the company said.
The company says AI adoption and reduced Google search traffic have caused a significant drop in traffic and revenue.
Chegg headquarters in Santa Clara, California, USA (David Paul Morris/Bloomberg via Getty Images/Getty Images)
“The new reality of AI and reduced traffic from Google to content publishers has led to a significant decline in Chegg’s traffic and revenue,” the company said.
To adapt, Chegg said it will streamline operations to reduce costs and invest more in what it calls fastest growing area – the $40 billion+ ‘skills market’.”
This illustration shows the Google logo and AI Artificial Intelligence words. (REUTERS/Dado Ruvic/Illustration/File photo / Reuters Photos)
Chegg said it plans to expand traditional study assistance into a “skills-focused business-to-business organization” offering programs in language learning, workplace readiness and AI-related skills.
These new segments are expected to generate revenues of approximately $70 million by 2025 and achieve double-digit growth by 2026.
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Chegg reiterated its third-quarter guidance, warning investors of “risks and uncertainties” related to the evolving AI landscape — including “the effects of AI technology on our business and the broader economy” and its ability to “stabilize the business by attracting new learners” amid a decline in traffic.
