Chegg Inc Embraces AI Strategy with CheggMate Amid Workforce Reduction and Stock Challenges

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Oh, the times, they are a-changin’, especially for our friends at Chegg Inc., the homework-help giant that’s feeling the heat from AI-powered chatbots like ChatGPT. Yes, it appears Chegg is bidding adieu to a not-so-insignificant 4% of their workforce, which translates to 80 employees worldwide.

Why, you ask? Well, it’s all in the name of embracing their AI strategy, as disclosed in a recent regulatory filing. Chegg CEO Dan Rosensweig has seen the writing on the wall and realized that sometimes students will, indeed, favor an AI chatbot over a human tutor. Maybe it’s the allure of interacting with the future or perhaps it’s just the convenience. Whatever the case, Chegg is diving headfirst into the AI pool.

The company’s master plan involves incorporating AI into its brand, nudging students to take advantage of their automated tutor interface, cheekily named CheggMate. Because who wouldn’t want a friendly, AI-powered pal to help them with their homework, right?

But as it turns out, not everyone is thrilled about Chegg’s AI-centric turn. Back in May, when the company first acknowledged the impact of generative AI on its business, its stock took a dramatic nosedive, plunging 48% in a single day. Ouch. And the hits keep coming, with shares down 57% so far this year.

Remember, Chegg’s bread and butter has been selling subscriptions for problem-solving and homework assistance. So, while the pivot to AI may be a necessary step in keeping up with the technological Joneses, the transition is sure to be a bumpy one. Only time will tell if CheggMate will be the knight in shining (digital) armor that saves the day or if this AI adventure will result in more growing pains for the company.

Source: www.bloomberg.com