Chegg (NYSE:CHGG), an education company, has recently disclosed its plans to reduce its global headcount by approximately 4%. This strategic move is aimed at enhancing the company's AI capabilities and driving transformative changes in the higher education sector. With this decision, Chegg anticipates incurring charges of around $5M to $6M related to the layoffs. In a letter to employees, CEO Dan Rosensweig expressed the need for organizational evolution and emphasized the company's commitment to providing exceptional services to students. However, the announcement of the layoffs, combined with concerns over the impact of AI, has negatively affected Chegg's stock performance, which has witnessed a significant decline since the beginning of 2023.

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Chegg's AI Strategy and Workforce Reduction

As part of its commitment to leveraging cutting-edge AI technology, Chegg has unveiled plans to reduce its global headcount by approximately 4%, affecting around 80 employees. This strategic move is in line with the company's vision to achieve long-term, sustainable value for students and position itself as a frontrunner in driving essential changes within the higher education ecosystem. By embracing AI breakthroughs, Chegg aims to revolutionize its organization and enhance its ability to serve students effectively. The layoffs are an essential step toward reallocating resources and ensuring the company's workforce aligns with its AI-focused objectives.