Hit by AI, edtech firm Chegg slashes jobs and names new CEO in major overhaul

(Reuters) -Educational technology company Chegg said on Monday it would cut 388 roles globally, or about 45% of the workforce, to reduce costs and streamline operations as it works to adapt to the growing shift toward AI-powered tools. The company, which offers textbook rentals, homework help and tutoring, said the "new realities of AI and reduced traffic from Google to content publishers have led to a significant decline in Chegg's traffic and revenue". Chegg also said Dan Rosensweig would return as CEO effective immediately, replacing Nathan Schultz, who has stepped down and would serve as an executive adviser. Rosensweig had previously led the company from February 2010 to June 2024. The Santa Clara, California-based company expects to incur charges of roughly $15 million to $19 million related to the restructuring by the first quarter 2026, and $12 million to $16 million by the fourth quarter of 2026. It had 1,271 employees as of December 31, 2024, according to its latest annual report. Chegg, which sued Google over its AI summaries hurting traffic, had initiated a strategic review and was exploring a sale or take-private transaction. The company said on Monday it had concluded the review and would continue to operate as a standalone company. Its shares have fallen more than 10% so far this year, after slumping 85.6% in 2024. (Reporting by Vallari Srivastava in Bengaluru; Editing by Shilpi Majumdar)

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