EdTech Shake-Up: Chegg to Lay Off 22% of Workforce Amid AI Disruption

In a major move signaling the growing influence of AI in education, Chegg, a prominent online learning platform, announced that it will lay off 22% of its workforce, affecting approximately 248 employees. The company is taking this step to cut operational costs and streamline its structure, as students increasingly migrate to AI-driven learning tools such as Chat GPT and other advanced platforms.

For several months, Chegg has been experiencing a drop in user traffic, a trend it anticipates may continue due to major players like Google, which is integrating AI Overviews to keep searches within its ecosystem. Meanwhile, Open AI and Anthropic are actively engaging the academic community by offering free subscriptions to their AI tools—posing further competition to traditional edtech providers.

As part of its strategic realignment, Chegg plans to close its offices in the United States by the end of the year . and Canada by the end of 2025, while also reducing expenses related to marketing, product development, and administration. The company expects to incur restructuring charges of $34M–$38M over the next two quarters.

Despite the challenges, Chegg projects cost savings of $45M–$55M by 2025, and up to $110M in 2026. However, the impact is already visible in its Q1 2025 performance—subscriber numbers dropped 31% to 3.2 million, and revenue fell 30% to $121 million, with subscription service income alone down to $108 million.

 Key Takeaways:

22% workforce reduction (~248 employees)

 U.S. and Canada offices to close

 Projected savings of $100M+ by 2026

 AI tools like Chat GPT reshaping learning preferences

 Q1 revenue down 30%; subscriber count dropped 31%