Chegg cuts 1 / 4 of workforce amid AI stress
The tutorial expertise firm Chegg, identified for providing college students homework assist, introduced on Tuesday it’ll minimize practically 1 / 4 of its workforce in an effort to vary focus because it faces rising competitors from synthetic intelligence (AI) instruments.
The cuts would have an effect on 441 staff globally, the corporate mentioned in a letter to shareholders. CEO Nathan Schultz cited the necessity for Chegg to change into a “leaner, extra environment friendly, uncomplicated and quicker-moving firm.”
“As a result of rising calls for on the fashionable scholar, in addition to the fast proliferation of generic AI instruments, the necessity to broaden past tutorial options is extra vital for us than ever earlier than,” Schultz wrote. “The mixture of studying help companies with broader instruments for scholar success is required, differentiated and defensible.”
The information comes after a number of years of ups-and-downs at Chegg. In 2022, the corporate was accused of deceptive traders about its monetary development in 2020, although some consultants believed the spike was resulting from college students dishonest in programs that moved on-line. The allegations adopted September 2021 accusations by textbook publishing big Pearson, which claimed Chegg infringed on Pearson’s copyright by offering solutions to end-of-chapter questions in Pearson textbooks.
Chegg mentioned it plans to concentrate on reaching college students in highschool and earlier in faculty. It is going to additionally place extra consideration on worldwide college students—the corporate mentioned it’ll apply extra sources towards six unnamed nations within the coming yr.
Schultz additionally mentioned Chegg will transcend the everyday on-line instructional help mannequin it beforehand had, and concentrate on “360 levels” of particular person help, together with monetary literacy, early profession studying and group.
He added the corporate expects to avoid wasting roughly $45 million within the coming yr from the worker cuts, together with promoting two of its worldwide workplaces and different value saving measures.
