By Katherine Hamilton

Chegg said it will remain a public standalone company, but restructure how it operates, after initiating a business review in February to address declining traffic.

The online education company said Monday it would instead focus on a restructuring to tackle declining traffic and revenue, as AI has been routing many users away from its website. The restructuring will involve cutting its workforce nearly in half, bringing back its former chief executive, and shifting its business model to focus on workforce skill development.

Chegg plans to lower its cost structure for its services, with the hopes of generating more cash flow so it can invest more on its skilling business. The skilling business will be a business-to-business operation offering language learning, workplace readiness and AI-related skills courses, Chegg said.

The Santa Clara, Calif., company expects its skilling business to bring in $70 million in sales during 2025, with double-digit percentage growth in 2026.

Chegg also plans to cut 388 jobs, reducing its workforce by 45%. The job cuts will reduce 2026 adjusted expenses by $100 million to $110 million, the company said.

Former chief executive Dan Rosensweig, who stepped down in 2024 after nearly 15 years with the company, has also returned effective Monday. He succeeds Nathan Schultz, who will become an executive adviser to the chief executive and board of directors.

Chegg hired Goldman Sachs earlier this year to help it figure out how to deal with the loss of subscribers and engagement. New AI software, like OpenAI's ChatGPT and Google's AI Overviews, are creating more competition for Chegg's education services and eating into its traffic. Chegg also filed a complaint against Google alleging it blocked traffic from coming to Chegg.

Chegg shares gained 6% to $1.53 in after-hours trading. Through the close, the stock was down 10% this year.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

October 27, 2025 17:10 ET (21:10 GMT)

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