Chegg To Layoff 22% Of Its Workforce, CEO Says Trends Impacting Business Will Worsen Before They Get Better

Shares of education technology company Chegg Inc. (CHGG) climbed over 6% on Monday after the firm announced plans to lay off 22% of its workforce, equivalent to 248 members, and reported upbeat first-quarter revenue.

Chegg announced cost-cutting plans on Monday, including expense reductions across its business. These include closing physical offices in the U.S. and Canada by the end of the year, limiting upper funnel marketing, reducing new product development efforts, and cutting general and administrative expenses.

The measures are expected to generate $45 million to $55 million of savings in 2025, with full-year savings of $100 million to $110 million in 2026. This is in addition to the $120 million in 2025 savings the company will realize from its two 2024 restructuring initiatives.

Chegg said the impact is concentrated in the U.S. and Canada and predominantly affects the Chegg Study and corporate services.

The company reported its first-quarter (Q1) earnings on Monday, with revenue declining 30% year-over-year (YoY) to $121.4 million and beating a Street estimate of $114.61 million, according to Koyfin data.

The firm posted an adjusted net loss of $0.06 per share compared to $0 estimated by analysts.

CEO Nathan Schultz expressed confidence in the conversations regarding the company’s strategic alternatives process.

“Despite these promising developments, we believe the trends impacting our business will worsen before they get better. We are taking steps to further align costs with our outlook, including an additional restructuring of our business,” he said.

For the second quarter (Q2), Chegg expects total net revenues to be $100 million to $102 million and subscription services revenues from $85 million to $87 million. Gross margin is expected between 64% and 65%, while adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) is seen in the range of $16 million to $17 million.

Chegg shares have declined over 57% in 2025 and over 84% in the past 12 months.

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