Chegg, an online learning platform, is set to cut about 4% of its workforce. The news comes after the company’s CEO, Dan Rosensweig, admitted that OpenAI’s ChatGPT was significantly impacting the company’s ability to attract new customers. Chegg is a platform that focuses on subscription-based homework help, textbook rentals, test preparation, and other education-related resources for students. OpenAI’s chatbot technology, ChatGPT, offers access to much of the same information for free. This has caused concerns about the potential to fuel student cheating on school assignments, cause massive job losses, spread online misinformation or even cause the downfall of humanity.
Chegg’s planned cuts will affect about 80 employees, with the company citing that this will better position it to execute its AI strategy and create long-term sustainable value for its students and investors. The company expects to incur charges of about $5 million to $6 million in connection with these actions, primarily consisting of cash expenditures for severance payments, employee benefits, and related costs.
Chegg is developing its own AI chatbot called CheggMate, in collaboration with OpenAI. Rosensweig says that CheggMate will harness the power of ChatGPT paired with Chegg’s proprietary data and subject matter experts to make learning more personalized, adaptive, accurate, fast, and effective. Chegg’s stock fell by 48% in one trading session following the announcement by Rosensweig. Shares are down a whopping 57% since the start of the year, which coincided with the wider adoption of ChatGPT.
