Chegg Cuts 45% of Staff, Swaps CEOs as AI “Destroys” Homework Help

SANTA CLARA, Calif. — Chegg is cutting 388 jobs, or roughly 45% of its workforce, in a massive move to survive the “new realities of AI.” The education technology company announced the layoffs today, marking its second major round of cuts this year as students ditch paid subscriptions for free tools like ChatGPT.

Key Facts

• Massive Cut: 388 employees (45% of staff) let go immediately.
• Leadership Change: CEO Nathan Schultz is out; former CEO Dan Rosensweig returns.
• Stock Collapse: Shares are down 99% from their 2021 peak.
• Source: CNBC, SFGATE

The AI Reality Check

Chegg built a billion-dollar business by helping students with homework. Now, artificial intelligence is doing that work for free. The company explicitly blamed the “new realities of AI” and a drop in Google search traffic for the cuts. Students are simply not signing up for Chegg’s paid services when they can get instant answers from generative AI models.

This is a survival move. The company says the cuts will help save cash, but the damage to its core business is severe. Revenue has dropped as the shift to AI tools speeds up.

CEO Swap and Severance

Along with the layoffs, Chegg is shaking up its top leadership. Nathan Schultz, who took over as CEO earlier this year, is stepping down. He will be replaced by Dan Rosensweig, the longtime leader who ran the company during its boom years.

While hundreds of workers face uncertainty, Schultz is leaving with a safety net. According to regulatory filings, he will receive a severance package worth roughly $3.2 million, which includes cash payments and stock vesting.

Financial Freefall

The numbers paint a bleak picture. Chegg’s stock, which once traded near $115, has crashed to under $2. The company is trying to fix its balance sheet by cutting costs, but the market has largely lost faith in its ability to compete with free AI. The company plans to focus on “specialized” skills training, but for now, the story is about shrinking to stay alive.