• Chegg plans to lay off 22% of its workforce, affecting about 248 employees.
• The layoffs are attributed to competition from AI tools such as ChatGPT and Google's AI Overviews.
• Chegg anticipates significant cost savings of up to $110 million through restructuring.
• The organization will close its U.S. and Canada offices by the end of the year.
• Declines in subscriber numbers and revenue have significantly impacted Chegg's business operations.

Chegg has officially announced plans to lay off approximately 22% of its workforce, translating to 248 employees, as a strategic move to reduce costs amid rising competition from AI tools like ChatGPT. This decision reflects ongoing challenges as more students gravitate towards AI-powered solutions instead of traditional online educational services. Chegg's situation has been compounded by a sustained decline in web traffic, a trend that the company has acknowledged may continue to worsen before any potential recovery, according to Channel News Asia, India Times, and Reuters.

As part of its restructuring efforts, Chegg plans to close its offices in the U.S. and Canada by year-end and intends to further reduce marketing, product development, and administrative expenses. This strategic overhaul is estimated to incur costs between $34 million and $38 million during the second and third quarters of the year. The company hopes to realize savings between $45 million and $55 million in 2025, and $100 million to $110 million by 2026, according to Channel News Asia, India Times, and Reuters.

Chegg's recent quarterly results highlight a troubling decline in its subscriber base, which has decreased by 31% to 3.2 million, and its revenue falling by 30% to $121 million. The subscription services revenue also suffered a significant drop, falling nearly a third to $108 million as the firm grapples with the competitive pressures exerted by Google's AI Overviews and similar offerings from other AI companies such as OpenAI and Anthropic. Earlier this year, Chegg filed a lawsuit against Google, claiming that its internet search practices hinder the demand for original content and negatively impact educational publishers, according to Channel News Asia, India Times, and Reuters.