Chegg, Down From $12 Billion To $159 Million In Value, Lays Off Hundreds; CEO Blames Google and AI (sfgate.com) 23
Chegg, the online education company, is laying off 319 workers as it struggles to compete against modern AI chatbots. SFGATE reports: Chegg announced the new layoff round, which will hit 21% of its workforce, in a filing with the Securities and Exchange Commission on Tuesday. The company delivered the news alongside another brutal quarterly financial report; Chegg lost more than $212 million from July through September. CEO Nathan Schultz, in prepared remarks accompanying the report, expressed some optimism but called it a "trying time" for his company. Chegg provides grammar and plagiarism checkers, plus course-by-course study help, along with much-used textbook solution guides.
"Technology shifts have created headwinds for our industry and Chegg's business specifically," Schultz said. "Recent advancements in the AI search experience and the adoption of free and paid generative AI services by students, have resulted in challenges for Chegg. These factors are adversely affecting our business outlook and are requiring us to refocus and adjust the size of our business." He specifically called out Google's AI overviews, a recent change to search results that pulls information from news outlets and sites like Chegg and summarizes above the classic blue links. Schultz said that his team believes Google is "shifting from being a search origination point to the destination" in an attempt to keep market share.
Schultz also blamed generative AI chatbots like OpenAI's ChatGPT, saying that students see the tool and others like it as "strong alternatives" to Chegg. Web traffic has dropped sharply as a result, Schultz wrote. A Wall Street Journal story published Saturday said Chegg "is trying to avoid becoming [ChatGPT's] first major victim" and that the company had lost more than 500,000 subscribers, some who paid almost $20 a month, since the chatbot's 2022 launch. Despite the negative business impact, it seems Chegg is experimenting with new tech. Schultz said in the remarks that the company had formed an "arena" to evaluate AI models and aims to "integrate AI into the full learning journey."
"Technology shifts have created headwinds for our industry and Chegg's business specifically," Schultz said. "Recent advancements in the AI search experience and the adoption of free and paid generative AI services by students, have resulted in challenges for Chegg. These factors are adversely affecting our business outlook and are requiring us to refocus and adjust the size of our business." He specifically called out Google's AI overviews, a recent change to search results that pulls information from news outlets and sites like Chegg and summarizes above the classic blue links. Schultz said that his team believes Google is "shifting from being a search origination point to the destination" in an attempt to keep market share.
Schultz also blamed generative AI chatbots like OpenAI's ChatGPT, saying that students see the tool and others like it as "strong alternatives" to Chegg. Web traffic has dropped sharply as a result, Schultz wrote. A Wall Street Journal story published Saturday said Chegg "is trying to avoid becoming [ChatGPT's] first major victim" and that the company had lost more than 500,000 subscribers, some who paid almost $20 a month, since the chatbot's 2022 launch. Despite the negative business impact, it seems Chegg is experimenting with new tech. Schultz said in the remarks that the company had formed an "arena" to evaluate AI models and aims to "integrate AI into the full learning journey."
Huh. (Score:5, Insightful)
A subscription cheating service is upset that students are using a free cheating service.
Chegg made a profit (Score:2)
The odd thing compared to other VC internet startups is that Chegg made a profit 1 year out of the last 5 unlike many of the VC internet businesses.
Boo. Hoo. (Score:3)
Re: (Score:2)
Re: (Score:1)
ChatGPT may be a good tool to cheat in jobs where real skill don't matter.
It is pretty much worthless elsewhere.
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I see people say that ChatGPT & Co. are "worthless" - and it only shows that you haven't bothered how to use the tools.
Sure, there's a lot of stuff they cannot do, but use them correctly, and they are huge time savers. Can't remember a specific API call? Want a quick translation? Want an important mail checked for errors before you send it off? Ran across something new, and want a quick summary of what it's all about? There are many, many use cases where the LLMs are helpful.
With LLMs, we have a new
Re: (Score:1)
I have "bothered to use the tools".
Like I said, they are worthless except for stuff you don't care about anyway.
Can't remember a specific API call? Excellent choice to have a statistical algorithm that doesn't know shit about the task at hand picking it for you.
Want a quick translation? Great way to get a confusing stream of words that at best means something different.
Want an important mail checked for errors? Too bad you're semi-illiterate and can't know if what the "AI" spit out is any better.
Ran across
Re: Boo. Hoo. (Score:2)
Jeez, who peed in your cornflakes?
You're a semi-literate, unread and lazy PoS
Thanks for your valuable opinion. You're wrong on all counts. Oh, and you obviously have *not* bothered to learn how to use the tools we're discussing. You also need a course in manners.
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You're wrong on all counts
Nonsense. He's spot-on. If you actually expect reliable results for any of the things you or he mentioned, you're delusional.
With LLMs, we have a new tool in our toolboxes.
These aren't tools, they're toys. As you obviously haven't noticed, you can't trust the output. You're either wasting a lot of time, producing a lot of nonsense, or both.
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So much butthurt that you took a comment describing a general category of people really personally?
I see, you've already been hit by your decision to swap out competence for an "AI toolkit".
Well, choices have consequences :)
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Chegg is popular with school-cheats. They can go pound sand now.
Not really, take a closer look and you'll find that they simply became Chat GPT 'prompt engineers'.
Could be worse (Score:3)
You could buy a social media company for $44B and then screw around with it until it is worth $9.4B.
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felon muesk will not last 4 years with donold. it isn't very likely he'll even last 4 months. that kind of "relationships" tends to sour very quickly, twice so given trump's staff turnover rate.
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On the Rogan show, Trump said that he didn't trust businessmen and that's why he didn't appoint them to anything
So he lied about this too, because look at all his real appointments - most of them are businessmen.
ChatGPT speaks with forked tongue (Score:2)
Haha (Score:2)
Serious question: how much of Chegg's services are tutoring versus cheating?
Assuming it's mostly cheating: first reaction: haha. It'll be great for this service to not be available, and it'll be interesting for cheating to be more obviously transparent.
Second reaction: I wonder how this will affect the equity of the world. I don't want the people that are less smart of have ADHD to have worse lives. Yet I don't want people with less integrity to get ahead. I also don't want people with less integrity to hav
cheggit (Score:2)
Having never heard of this company before, i first thought Chegg was somehow related to Cheggit, a long-defunct torrent site for, uh, culture stuff. Hope that Cheggit was somehow resurrected quickly turned into disappointment.
Chegg is not using AI ... (Score:1)
So blames AI for destroying it's business model of allowing students to cheat
Bad teachers use plagiarism detectors and AI detectors ... Good teachers know their students, and so know if they wrote something or got someone, of something else to write it for them ...