Chegg and AI
AI search gutted Chegg: ~99% stock crash, half the staff cut
Chegg's homework-help business has collapsed as students shift to ChatGPT and Google AI Overviews answer queries directly. The company is cutting deep, pivoting to skilling, and exploring strategic alternatives.
What happened
- Cut ~45% of staff (388 roles) in Oct 2025 citing 'new realities of AI,' after a 22% cut (248 roles) in May 2025.
- Stock has lost ~99% from its Feb 2021 peak of ~$113, with market cap down to roughly $130-160M by 2026.
- Sued Google in Feb 2025 over AI Overviews diverting traffic; case still pending in late 2025.
- Pivoting toward a 'Skilling' segment while formally reviewing strategic alternatives (2025).
AI angle
ChatGPT and Google's AI Overviews give students free, instant answers, erasing demand for Chegg's paid Q&A and crushing its search traffic.
Sources
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Chegg
AI search gutted Chegg: ~99% stock crash, half the staff cut. ChatGPT and Google's AI Overviews give students free, instant answers, erasing demand for Chegg's paid Q&A and crushing its search traffic.
AIFear.com
Company-impact notes are curated, dated summaries; this profile set was last web-verified on 2026-06-27. Informational only — not investment advice. Spotted something stale? Request a correction.