If thinking about Chegg gives you PTSD to the days when you were in school, I might have some good news for you: The company known for textbook rentals and homework help is running on fumes. Chegg’s stock is down a whopping 99% since its highs in 2021, erasing $14.5 billion in value, and the company has lost half a million paid subscribers.
After revenue keeps dropping quarter after quarter, there are doubts it will be able to continue paying its debts. Chegg should be familiar to most people who have been to college in recent years. It started out in the 2000s renting out textbooks and later expanded into online study guides, and eventually into a platform with pre-written answers to common homework questions.
Unfortunately, the launch of ChatGPT all but annihilated Chegg’s entire business model. The company for years paid thousands of contractors to write answers to questions across every major subject, which is quite a labor intensive process—and there’s no guarantee they will even have the answer to your question. As we know, ChatGPT on the other hand has ingested pretty much the entire internet, and has likely seen any history question you might throw at it.
As the Wall Street Journal reports , the launch of ChatGPT saw students drop their $20 a month Chegg subscriptions in favor of the chatbot: It’s unclear what Chegg can really do to stem the bleeding at this point. The company laid off 441 employees over the summer, a quarter of its workforce. It’s trying .
