Chegg, an online education service, has experienced a 99% drop in its share price in under four years. While a post-pandemic slump in digital learning contributed, the rise of AI, particularly ChatGPT, is a significant factor. ChatGPT provides a free alternative to Chegg's services, which primarily involves human tutors assisting students with homework assignments.
Chegg's CEO, Nathan Schultz, acknowledged the negative impact of technological shifts on the company's performance. As a result, Chegg announced layoffs, firing a fifth of its workforce on November 12th.
In less than four years the share price of Chegg, an online education service, has dropped by 99%. A post-pandemic slump in digital learning is partly to blame for its tumble. A bigger problem for the company, though, is artificial intelligence (AI). Its customers are mostly students who want help answering their homework assignments, which often involves the virtual support of a human tutor. The rise of ChatGPT and its kind have created a free substitute for that service. On an earnings call on November 12th Nathan Schultz, Chegg’s boss, admitted that “technology shifts have created headwinds”. The same day the firm said that it would fire a fifth of its workforce.
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