Chegg (NYSE:CHGG) layoffs are a hot topic on Tuesday after the direct-to-student learning platform operator announced a restructuring plan.
The Chegg layoffs will have the company cutting 23% of its global workforce. that comes to 441 of its employees. It anticipates that this will result in annual savings between $40 million to $50 million by 2025.
As part of these layoffs, Chegg will be closing down two of its offices outside of the U.S. The company also expects to suffer charges of $10 million to $14 million connected to the closings and job cuts. It expects most of these charges to occur in the fourth quarter of 2024.
Chegg Chief Financial Officer David Longo said this about the layoffs:
“This action today delivers on our promise to better align our expense base with our current revenue trends. 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.”
What’s Behind the Chegg Layoffs?
Chegg is cutting jobs as it is experiencing increasing competition from artificial intelligence (AI) chatbots such as ChatGPT. The company previously warned that the rise in these AIs would harm its subscriber growth.
CHGG stock is up 15.7% as of Tuesday morning but is down 71.8% year-to-date.
Investors looking for more of the most recent stock market stories are in luck!
We have all of the hottest stock market news on Tuesday! A few examples include what’s going on with shares of NextEra Energy (NYSE:NEE), Silk Road Medical (NASDAQ:SILK) and Fisker (OTCMKTS:FSRN) stock today. All of that news is available at the links below!
More Stock Market News for Tuesday
- NEE Stock: The $2 Billion Reason NextEra Energy Is Stumbling Today
- Why Is Silk Road Medical (SILK) Stock Up 24% Today?
- Fisker Stock Alert: Fisker Files for Ch. 11 Bankruptcy
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
