Chegg is Set to Disintegrate Amid AI Competition, Company Cuts Hundreds of Jobs and Replaces CEO.
In a drastic move, Chegg has laid off 388 employees - nearly half of its workforce - due to severe financial struggles stemming from the rise of artificial intelligence-powered competitors. The company's troubles began when ChatGPT and similar AI tools started eroding traffic and revenue, forcing it to reevaluate its business model.
The writing was on the wall for Chegg, which had previously experienced an astronomical 345% surge in stock price between March 2020 and January 2021. At the time, the company's unique selling points - a vast library of 46 million textbooks and an army of 70,000 Indian experts available to answer student queries within minutes - drove its success. Chegg even cost just $14.95 per month.
However, as AI-powered chatbots like ChatGPT gained traction, Chegg's fortunes began to decline precipitously. The company's stock price plummeted by 99% in a single year, wiping out $14.5 billion in value. Chegg attempted to counter with its own chatbot but ultimately failed.
In an effort to turn the ship around, Chegg filed a lawsuit against Google last February, alleging that the search giant had profited from pilfering proprietary content. However, it seems the damage was already done.
The latest move by Chegg comes as CEO Dan Rosensweig - who previously led the company during its more successful era - takes the reins once again. A review into the possibility of going private or being sold to a rival firm also revealed that Chegg will remain publicly traded and keep Rosensweig at the helm.
With its vast library of textbooks and Indian workforce dwindling, it's unclear whether Chegg can recover from this crippling blow. The writing may not be on the wall just yet, but the signs are certainly ominous for the struggling ed-tech giant.
In a drastic move, Chegg has laid off 388 employees - nearly half of its workforce - due to severe financial struggles stemming from the rise of artificial intelligence-powered competitors. The company's troubles began when ChatGPT and similar AI tools started eroding traffic and revenue, forcing it to reevaluate its business model.
The writing was on the wall for Chegg, which had previously experienced an astronomical 345% surge in stock price between March 2020 and January 2021. At the time, the company's unique selling points - a vast library of 46 million textbooks and an army of 70,000 Indian experts available to answer student queries within minutes - drove its success. Chegg even cost just $14.95 per month.
However, as AI-powered chatbots like ChatGPT gained traction, Chegg's fortunes began to decline precipitously. The company's stock price plummeted by 99% in a single year, wiping out $14.5 billion in value. Chegg attempted to counter with its own chatbot but ultimately failed.
In an effort to turn the ship around, Chegg filed a lawsuit against Google last February, alleging that the search giant had profited from pilfering proprietary content. However, it seems the damage was already done.
The latest move by Chegg comes as CEO Dan Rosensweig - who previously led the company during its more successful era - takes the reins once again. A review into the possibility of going private or being sold to a rival firm also revealed that Chegg will remain publicly traded and keep Rosensweig at the helm.
With its vast library of textbooks and Indian workforce dwindling, it's unclear whether Chegg can recover from this crippling blow. The writing may not be on the wall just yet, but the signs are certainly ominous for the struggling ed-tech giant.
- the AI revolution was bound to disrupt traditional educational platforms. Their reliance on human experts and vast library of textbooks was always going to be a challenge in today's digital age 
. The fact that they were slow to adapt to ChatGPT and other similar tools is concerning 
. It's interesting to see how Chegg has chosen to restructure rather than invest more in AI-powered solutions, though 
. Ultimately, it will be fascinating to watch how this situation unfolds and whether they can find a way to innovate their way back to success 
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...i mean i get that ai is changing things fast and all, but 388 ppl losing their jobs? thats crazy 
...i used to love using chegg to study for my exams back in college, and the indian experts were always super helpful too 
...but i guess they just got left behind by the competition...anyway, its not like chegg was doing anything wrong or unique lol, it was just trying to adapt...hopefully dan rosensweig can turn things around now 
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vs human teacher 
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. It's not just about the financial struggles, it's also about adaptability. Can you still be relevant in 2025 with AI-powered chatbots? I'm not sure 
...
I'm not sure what they're gonna do at this point, but it's gonna be an interesting ride to watch... or rather, a total crash and burn for Chegg, lol! 
I mean, if you're struggling to compete with AI-powered chatbots, maybe it's time to pivot? 
But at the same time, I think Chegg needs to acknowledge that AI is here to stay.
... But ChatGPT just came out of nowhere and pooped all over their business plan 
It seems like they're trying to hold on to the past rather than embracing the AI revolution 
and dan rosensweig is back as ceo lol what a plot twist 
i mean im kinda sad for chegg but at the same time it's like they should've seen this coming 
those 345% stock prices were just too good to be true 
? It's like they say, 'you can't teach an old dog new tricks' 
. As for CEO Dan Rosensweig taking the reins again, only time will tell if he can lead Chegg back to success 
!
They had the best resources and those 70k experts were always so helpful 
How can this be happening?! 
Please tell me they can 
they gotta think of something new or risk going outta biz 
. Like, didn't they see this coming? 
Still, I guess you can't blame them for trying, right? It's not like they had a crystal ball or anything 
. But hey, at least their library of textbooks is still intact 
. Poor Chegg, they thought they could compete with this AI overlord and now their workforce is being cut down to size! 
and chatgpt has proven to be a serious contender. i mean, who needs human experts when u can have ai? 
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