The education sector is undergoing a dramatic transformation—and not everyone is making it through unscathed.
In a stark reminder of how AI is reshaping industries, Chegg, the well-known U.S.-based EdTech company, has laid off 248 employees, amounting to 22% of its workforce. The reason? Students are increasingly turning to AI-powered platforms like ChatGPT for study help, explanations, and tutoring—services that were once Chegg’s bread and butter.
This isn’t just a company restructuring. It’s a case study in how generative AI is fundamentally disrupting traditional business models—especially those built on static content and one-size-fits-all tutoring.
🧠 The Rise (and Struggle) of Chegg
Founded in 2005, Chegg started as a textbook rental service and quickly evolved into a full-scale learning platform. At its peak, Chegg was helping millions of students with:
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Step-by-step homework solutions
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Expert Q&A
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Online tutoring
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Test prep and more
But over the past year, usage patterns have shifted dramatically. With the public release of tools like ChatGPT, students now have on-demand access to context-aware, conversational help, often free or bundled with other services.
⚠️ What Happened?
In its official statement on Monday, Chegg described the layoffs as part of a broader cost-reduction and focus realignment effort. The company acknowledged that:
"As student behavior rapidly shifts toward AI-driven platforms, we must adapt to remain competitive and deliver value."
This comes after months of plummeting stock prices, executive shakeups, and failed attempts to integrate AI into their core products. In 2023, Chegg’s CEO had already admitted in an earnings call that ChatGPT was “having an impact on our new customer growth rate.”
Translation: students no longer need to pay for answers when AI can explain things better, faster, and often for free.
📊 The Numbers Behind the Shakeup
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248 employees laid off, including roles in content, product, and support teams
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~22% reduction of total workforce
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The company will incur restructuring charges in the next quarter
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Chegg’s stock price has dropped over 60% from its pandemic-era highs
🤖 The Bigger Picture: AI’s Disruption of EdTech
Chegg is not the only one feeling the heat. Across the EdTech industry, traditional models based on static content libraries, subscription Q&A banks, and human-based tutoring are struggling to compete with LLMs that can:
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Explain complex concepts in natural language
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Solve problems step-by-step
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Generate practice questions or quizzes on demand
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Provide personalized learning experiences
And unlike most EdTech services, ChatGPT doesn’t sleep, doesn’t charge per question, and never says, “Sorry, I don’t know.”
🧩 Is This the End of EdTech?
Not at all. But it is the end of EdTech as we knew it.
Here’s what this new era demands:
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AI-Integrated Learning Platforms: Tools that blend generative AI with curriculum-aligned content, adaptive assessments, and educator oversight.
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Human-AI Collaboration: Tutors and teachers who use AI to scale their impact—not compete against it.
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Skill-Focused Microlearning: Personalized, just-in-time modules tailored to learner goals, driven by AI insights.
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Community-Driven Learning: Platforms that leverage discussion, peer learning, and social accountability (something AI can’t yet replicate).
Companies that rely solely on content delivery are facing an existential threat. The future lies in experiences, not just information.
🧠 What Can We Learn from Chegg’s Crisis?
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Adaptation must be proactive, not reactive. Waiting for market signals is too slow in the age of exponential AI growth.
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AI is not just a feature—it’s an entirely new interface for learning. Bolting it on isn’t enough.
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Job roles in content, support, and operations must evolve. There will still be work—but it may require new skills and flexibility.
👩🏫 What About the People?
Behind every headline about "248 layoffs" are real individuals—educators, content creators, engineers—now facing job insecurity. As we celebrate the rise of AI, we must also think critically about:
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Reskilling: How do we equip displaced workers with AI fluency?
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Ethical deployment: How can companies adopt AI without blindside layoffs?
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Human value in the loop: What roles will humans uniquely continue to play?
AI doesn’t eliminate the need for people—it changes what people are needed for.
🔮 Final Thoughts
Chegg’s layoffs are a warning shot to every company built around information-as-a-service. In the age of AI, information is cheap—but insight, guidance, context, and empathy are not.
If you're building for the future of education, the lesson is clear:
💡 Don’t just compete with AI—collaborate with it.