Investing.com – Chegg Inc. (NYSE:) experienced a 20.3% surge in post-market deals on Monday after announcing a restructuring plan that will lay off 441 employees, representing 23% of the company’s global workforce.
Nathan Schultz, President and CEO of Chegg, said: “Today we implemented a restructuring that is an important step in my plans to refocus Chegg and return to subscriber and revenue growth. These changes are designed to make us a more focused, more efficient, simpler and faster-growing company. Our renewed focus on our core audience – students – will enable us to address unmet needs with a differentiated, holistic and vertically focused education offering.”
The strategy involves providing students with holistic and unique products that combine academic and functional support. This approach will integrate aspects such as organizational skills, early career learning, financial literacy and community into a single, accessible platform. The goal is to bridge gaps in the student experience by differentiating Chegg from other companies that offer one-dimensional learning support or broad, generic offerings.
Chegg’s unique selling proposition will include a single platform powered by education-specific artificial intelligence, a proprietary learning model, more than 100 million pieces of content, subject matter experts to ensure quality, and now 360-degree functional support services.
Following the announcement, BMO analysts noted: “We expect the stock to react positively.”
By 2025, the company expects to achieve non-GAAP cost savings of $40 million to $50 million through employee attrition, the closure of two non-U.S. offices and other cost rationalization efforts.
Chegg forecasts it will incur $10 million to $14 million in expenses related to the restructuring, with about half of that coming in the second quarter and the majority of the expense coming in the fourth quarter of 2024.