Chegg stock falls after disclosing it’ll cut 80 jobs as part of a reorganization to ‘fully embrace’ AI

Shares of Chegg Inc.
CHGG,
-2.74%
pulled back 1.0% in afternoon trading Tuesday, after the online education company disclosed that it was laying off about 4% of its workforce. In an 8-K filing late Monday, the company said the lay offs were part of its reorganization to “fully embrace and utilize” the breakthroughs seen in artificial intelligence (AI). The company said it would record charges of about $5 million to $6 million as it cuts about 80 employees, which amounted to 3.9% of the 2,071 employees the company had as of Dec. 31. Prior to Tuesday’s decline, Chegg’s stock had run up 21.7% since closing May 31 at a six-year low of $8.98. Back on May 2, the stock had plummeted 48.4% after the company provided a downbeat revenue outlook, saying user interest in ChatGPT’s generative AI hurt its new customer growth rate. The stock has plunged 57.2% year to date, while the S&P 500
SPX,
+0.64%
has gained 13.8%.