Chegg, the online education company, has announced it will lay off around 22% of its employees, which amounts to approximately 248 workers. This decision comes as part of a restructuring strategy prompted by the growing influence of AI technologies within the educational technology sector. Reuters highlighted the increasing challenge Chegg faces as students opt for free AI tools like ChatGPT for academic help, thus reducing Chegg's web traffic.

The impact of AI doesn't stop there. Google's expansion of its AI Overviews has further kept internet users within its search ecosystem, lessening the need for students to use external educational resources such as Chegg. As a result, Chegg is planning to close its offices in the U.S. and Canada by the end of the year and will scale back on spending related to marketing, product development, and administration. This restructuring is expected to result in charges of $34 million to $38 million over the next two quarters.

Despite these immediate costs, Chegg hopes to see significant savings in the near future, estimating reductions between $45 million and $55 million in 2025, increasing to $100 million to $110 million in 2026. However, the company reported a steep 31% drop in subscribers, bringing their total down to 3.2 million, alongside a 30% decrease in revenue, now at $121 million, during the first quarter of 2025. Such figures illustrate the fiscal pressures Chegg faces in adapting to the AI-driven educational landscape.