Online education company Chegg has announced plans to lay off 22% of its workforce, amounting to approximately 248 employees, as it struggles to adapt to the rapidly evolving landscape of AI-driven education. The move reflects broader turbulence in the edtech industry as students increasingly rely on advanced AI tools like OpenAI’s ChatGPT and Google’s Gemini for academic support, bypassing traditional platforms.
Chegg, once a go-to resource for textbook rentals, tutoring, and homework help, has seen a steady decline in web traffic over recent months. In a statement on Monday, the company acknowledged that this trend is unlikely to reverse in the near term, prompting the need for significant restructuring to manage costs and streamline operations.
A major contributor to Chegg’s challenges is the growing dominance of AI-powered search and learning tools. Google’s expansion of its AI Overviews has effectively kept user engagement within its own ecosystem, limiting the traffic that typically flows to third-party education sites like Chegg. Additionally, Google is gradually directing more search queries to its Gemini AI platform, reducing reliance on traditional educational search results.
Chegg also pointed to increased competition from other AI developers, such as OpenAI and Anthropic, which are aggressively targeting students and educators by offering free or subsidized access to their AI tools. These platforms provide instant, often personalized answers to academic queries, making them attractive alternatives to subscription-based services.
Chegg’s workforce reduction is part of a broader effort to reposition itself in a market that is being reshaped by generative AI technologies. While the company has signaled an intention to integrate more AI features into its own offerings, it faces an uphill battle in regaining relevance amid a crowded and fast-moving AI education space.
As the edtech industry undergoes rapid transformation, companies like Chegg must evolve or risk obsolescence. The layoffs underscore the urgency for traditional education platforms to innovate in the face of AI disruption or be left behind in the race for digital learning dominance.
