Chegg layoffs 2025 reflect the growing pressure AI tools are placing on traditional education platforms. On Monday, the company announced it would cut 22% of its workforce, or 248 employees, as it works to reduce costs and streamline operations.
Chegg has struggled with declining web traffic and a shrinking user base. More students now prefer AI-powered tools like ChatGPT and Google’s Gemini over textbook rentals and tutoring.
The company expects the traffic decline to continue before improving. It blamed part of the drop on Google’s AI Overviews, which provide summarized answers directly in search results, reducing visits to third-party sites.
Chegg also said companies like OpenAI and Anthropic are giving free AI tool access to academics. These offers increase competition and draw users away from its subscription-based services.
As part of the restructure, Chegg will shut down its U.S. and Canadian offices by the end of 2025. It also plans to reduce spending on marketing, product development, and administration.
Chegg expects to incur $34 to $38 million in restructuring charges, mostly in Q2 and Q3. However, the company forecasts cost savings of $45–$55 million in 2025 and $100–$110 million in 2026.
The company also released its Q1 2025 earnings. It reported a 31% drop in subscribers, down to 3.2 million, and a 30% revenue decline, totaling $121 million. Subscription services alone dropped nearly a third to $108 million.
In February, Chegg sued Google, claiming AI Overviews undermined original content and reduced site traffic. The lawsuit argues that Google’s search engine now discourages users from clicking through to full articles, hurting publishers like Chegg.
Chegg says it remains committed to supporting students. However, it admits the rise of AI-generated academic tools requires a major shift in strategy.
With education rapidly evolving, the Chegg layoffs 2025 mark a critical moment in the company’s attempt to adapt to a new AI-driven reality.
