Chegg, a leading student-first online learning platform, announced a restructuring plan today and published a Shareholder Letter describing its comprehensive strategy to refocus the company on its core audience – students – and provide 360 degrees of individualized support to learners in high school, college, and around the world.

Chegg's strategy focuses on providing holistic and differentiated product offerings for students, blending academic and functional support that will include organizational proficiency, early career learning, financial literacy and community into one affordable platform designed to address gaps in the student experience. While other companies provide one-dimensional learning support or broad generic offerings, Chegg will differentiate itself through the development of a single platform that incorporates artificial intelligence verticalized for education, our proprietary learning model, more than 100 million pieces of content, subject matter experts who reinforce quality, and now functional 360-degree support services, which extend the value of Chegg beyond traditional online educational support.

“Today, we executed a restructuring effort, a major step in my plans to refocus Chegg and return to subscriber and revenue growth,” said Nathan Schultz, Chegg President and CEO. “These changes are designed to make us a more focused, more efficient, uncomplicated, and quicker-moving company. Our renewed focus on our core audience – the student – will allow us to address an unmet need with an offering that is differentiated, holistic, and verticalized for education.”

As part of the restructuring plan and new strategy, Chegg will:

• Refocus on students with a comprehensive course load who are seeking positive learning outcomes and holistic support
• Reduce its global headcount by 23% to become a leaner, more efficient organization, increasing the speed of innovation and aligning its expense base with near-term revenue trends
• Dedicate more resources to its international program, initially targeting six countries
• Diversify distribution channels, including direct to educational institutions
• Execute a new brand and marketing strategy, including reaching students in high school and earlier in college
• Simplify systems and processes, using partners to leverage best-in-class software for applications that are not core to our business

“This action today delivers on our promise to better align our expense base with our current revenue trends,” said David Longo, Chegg’s Chief Financial Officer, “We expect the restructuring will result in non-GAAP expense savings for 2025 of $40 million - $50 million. 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.”

The restructuring includes the departure of 441 employees, which represents 23% of Chegg’s global workforce. In 2025, the company expects to realize non-GAAP expense savings of $40 million to $50 million from employee departures, the closure of two offices outside of the United States, as well as other cost rationalizations. Chegg expects to incur a $10 million to $14 million charge related to the restructuring, with roughly half in the second quarter, and substantially the charges will be incurred by the fourth quarter of 2024.