Chegg surges 20% in after-hours trade, announces restructuring plan, layoffs

Published 17/06/2024, 23:12
© Reuters.

Investing.com - Chegg Inc (NYSE:CHGG) experienced a 20.3% surge in post-market deals on Monday after announcing a restructuring plan which will see the exit of 441 employees, representing 23% of the company's global workforce.

Nathan Schultz, Chegg President and CEO said, “Today, we executed a restructuring effort, a major 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, uncomplicated, and quicker-moving company. Our renewed focus on our core audience – the student – will allow us to address an unmet need with an offering that is differentiated, holistic, and verticalized for education.”

The strategy involves delivering holistic and unique product offerings for students, combining academic and functional support. This approach will integrate aspects such as organizational proficiency, early career learning, financial literacy, and community into a single affordable platform. The aim is to address gaps in the student experience, setting Chegg apart from other companies that offer one-dimensional learning support or broad, generic offerings.

Chegg's unique selling proposition will include a single platform that leverages artificial intelligence specific to education, a proprietary learning model, over 100 million pieces of content, subject matter experts ensuring quality, and now, 360-degree functional support services. This comprehensive approach extends Chegg's value beyond traditional online educational support.

By 2025, the company anticipates realizing non-GAAP expense savings of $40 million to $50 million, resulting from employee departures, closure of two offices outside of the United States, and other cost rationalizations.

Chegg predicts it will incur a $10 million to $14 million charge related to the restructuring, with about half of this in the second quarter and the majority of charges incurred by the fourth quarter of 2024.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.