Editor’s note: This article was updated on June 20 to correct that layoffs at Chegg (NYSE:CHGG) will impact 23% of its workforce and that its office closures will occur outside of the U.S. 

• Chegg (CHGG) layoffs have the company cutting its workforce by 23%.
• That includes 441 employees from its global workforce.
• This comes as part of a larger restructuring that includes office closures

Chegg (NYSE:CHGG) layoffs are a hot topic on Tuesday after the direct-to-student learning platform operator announced a restructuring plan.

The Chegg layoffs will have the company cutting 23% of its global workforce. that comes to 441 of its employees. It anticipates that this will result in annual savings between $40 million to $50 million by 2025.

As part of these layoffs, Chegg will be closing down two of its offices outside of the U.S. The company also expects to suffer charges of $10 million to $14 million connected to the closings and job cuts. It expects most of these charges to occur in the fourth quarter of 2024.

Chegg Chief Financial Officer David Longo said this about the layoffs:

“This action today delivers on our promise to better align our expense base with our current revenue trends. For 2025, we remain committed to our goal of 30%+ Adjusted EBITDA margin, and we believe we can deliver at least $100 million in Free Cash Flow. We are also reiterating our previous second-quarter guidance that we provided on April 29, 2024.”

What’s Behind the Chegg Layoffs?

Chegg is cutting jobs as it is experiencing increasing competition from artificial intelligence (AI) chatbots such as ChatGPT. The company previously warned that the rise in these AIs would harm its subscriber growth.

CHGG stock is up 15.7% as of Tuesday morning but is down 71.8% year-to-date.

Source from Investor Place