Chegg Announces Restructuring Plan and New Vision for Growth

June 17, 2024 at 16:35 PM EDT

Chegg is now leaner and more focused, allowing teams to innovate faster and deliver on the Student First mission

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.

To learn more about Chegg’s restructuring plan, read the Shareholder Letter.

About Chegg

Millions of people all around the world learn with Chegg. No matter the goal, level, or style, Chegg helps learners learn with confidence. We provide 24/7 on-demand support, and our personalized learning assistant leverages the power of artificial intelligence (“AI”), more than a hundred million pieces of proprietary content, as well as a decade of learning insights. Our platform also helps learners build essential life and job skills to accelerate their path from learning to earning, and we work with companies to offer learning programs for their employees. Chegg is a publicly held company and trades on the NYSE under the symbol CHGG. For more information, visit www.chegg.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release, including statements regarding Chegg's strategy, its ability to create long-term, sustainable value for students and investors, the reduction in force and the number of employees impacted, the amount of the charges in connection with the reduction in force, the timing that such charges will be incurred, the plans for international expansion and localization, our restructuring effort, our Adjusted EBITDA margin goals, the amount of the cost savings and the timing of those savings, our 360 degrees of individualized support, our product and distribution strategy, our vision and plans for growth, our pace of innovation, our ability to reach new audiences, our new brand positioning and brand building, our process and platform enhancements, our 2025 free cash flow projection, our financial guidance, our organizational changes, and our strategy and our ability to execute it are forward-looking statements. The words “will,” “plans,” “expects” and similar expressions are intended to identify these forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions outside of the Company's control. In addition, new risks may emerge from time to time, and it is not possible for the Company to predict all risks, nor can it assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements made. In light of these risks, uncertainties and assumptions, the future events discussed in this press release may not occur and actual future results may be materially different from those anticipated or implied in the forward-looking statements.