Chegg slashes 45% of workforce, blames 'new realities of AI' (www.cnbc.com)

Chegg is cutting about 45% of its workforce — roughly 388 employees — blaming the “new realities” of artificial intelligence and sharply reduced traffic from search engines like Google for plummeting revenue. The textbook rental and homework-help company, which already cut 22% of staff in May, said it is restructuring its academic learning products, will remain a standalone public company, and has reinstated former CEO Dan Rosensweig effective immediately. Chegg has also sued Google, arguing that AI-generated summaries in search results have siphoned referral traffic and harmed subscriptions. For the AI/ML community this is a high-profile example of how large language models and generative AI are disrupting incumbent content and education businesses: LLMs (e.g., ChatGPT) can surface instant answers or synthesized summaries that reduce clicks to publisher content and undercut paid tutoring/homework services. Chegg is simultaneously investing in its own AI features (automatic flashcard generation and other tools) but faces competition from free, improving models and shifting user behavior. The case highlights technical and commercial implications — search-layer AI reducing downstream referrals, the need for differentiated, integrated AI offerings, and likely legal/monetization battles between content platforms and horizontally deployed generative models.