Chegg layoffs 2025: Chegg releases 22% of workforce as AI tools shakes Edtech industry

Chegg will also close offices in the U.S. and Canada by the end of this year [File] |Photo source: Reuters

Chegg said Monday that as students increasingly turn to Chatgpt on the traditional Edtech platform, it will reduce its workforce or 22% of its 248 employees or 248 employees. The company, an online education company that provides textbook rentals, homework help and tutoring, has been working to address the decline in network traffic for months and warns that the trend may worsen before it improves.

Chegg said Google expanded the extension of AI overview to limit network traffic to its search ecosystem while gradually shifting search to its Gemini AI platform, adding that other AI companies, including OpenAI and Anthropic, are looking for help from academia to have free access to the subscription.

As part of the restructuring announced on Monday, Chegg will also close its U.S. and Canada offices by the end of the year and aim to reduce its marketing, product development efforts, and general and administrative expenses.

Final expenses are expected to be incurred between $34 million and $38 million in the second and third quarters.

Chegg expects the cost of 2025 to $45 to $55 million in 2025 and $10 to $110 million in 2026 due to the restructuring.

It also reported the first quarter results on Monday, saying subscribers fell 31% during the period to 3.2 million. Revenue fell 30% to $121 million as its subscription service revenue reached nearly a third to $108 million.

In February, Chegg sued Google that Google’s internet search engines were eroding demand for original content and undermining publishers’ ability to compete with their AI-generated overviews, resulting in a decline in visitors and subscribers.

As of December 31, Chegg has 1,271 employees.