Chegg cuts 4% of staff over ChatGPT crushing business
Online learning platform Chegg has announced plans to cut around 4% of its workforce, amounting to approximately 80 employees. The move comes after the company’s CEO, Dan Rosensweig, admitted that OpenAI’s chatbot, ChatGPT, was having a significant impact on Chegg’s business, as more and more students use AI for homework assistance. Chegg has a heavy focus on subscription-based homework help, textbook rentals, test prep, and other education-related resources for students, and OpenAI’s chatbot offers access to much of the same information for free. Chegg expects to incur expenses of approximately $5 million to $6 million in connection with the workforce reduction, primarily consisting of cash expenditures for severance payments, employee benefits, and related costs.
Chegg’s AI chatbot, CheggMate, developed in collaboration with OpenAI, appears to be an attempt to address the issue. Rosensweig stated that CheggMate would “harness the power of ChatGPT paired with our proprietary data and subject matter experts to make learning more personalized, adaptive, accurate, fast and effective.” However, Chegg’s stock has fallen by 48% in one trading session following Rosensweig’s comments, with shares down by 57% since the start of the year.
OpenAI’s chatbot has become increasingly popular, raising concerns about its potential to fuel student cheating on school assignments, cause massive job losses, spread online misinformation, or even cause the downfall of humanity. Chegg’s decision to cut its workforce may be an indication of the growing impact of ChatGPT on the education industry.
What is Chegg?
Chegg is an online learning platform that offers students access to a range of education-related resources, including subscription-based homework help, textbook rentals, test prep, and other services.
What is OpenAI’s chatbot, ChatGPT?
OpenAI’s chatbot, ChatGPT, uses artificial intelligence to offer students access to a range of information for free, with just a few keystrokes. It has become increasingly popular, raising concerns about its potential impact on the education industry.
What is CheggMate?
CheggMate is Chegg’s own AI chatbot, developed in collaboration with OpenAI. The company hopes that it will help to make learning more personalized, adaptive, accurate, fast, and effective. However, some analysts suggest that it may not be enough to counter the impact of ChatGPT on Chegg’s business.
What are the concerns about the use of AI in education?
Critics have warned that AI could fuel student cheating, cause massive job losses, spread online misinformation, or even put humanity at risk. However, proponents argue that AI could also help to make education more accessible and effective, and that its potential benefits outweigh the risks.
“ChatGPT’s detrimental impact on business leads to 4% staff reduction at Chegg”
Chegg, an online learning platform, has announced plans to reduce its workforce by approximately 4% in response to increased competition from artificial intelligence (AI) tools. The move comes weeks after Chegg CEO, Dan Rosensweig, acknowledged that OpenAI’s ChatGPT was “crushing” Chegg’s business as more students turn to AI for homework help. The job cuts will affect around 80 employees and are designed to help Chegg execute its own AI strategy and create long-term sustainable value for students and investors. The company expects to incur costs of between $5 million to $6 million for severance payments, employee benefits, and related spending.
Chegg’s traditional subscription-based homework help, textbook rentals, test preparation, and other education resources for students are at risk as more students embrace OpenAI’s ChatGPT. Critics warn that the AI chatbot could lead to student cheating, job losses, online misinformation or even the downfall of humanity. Chegg’s stock fell by 48% in one trading session following Rosensweig’s admission, and shares are down 57% since the start of the year. Chegg has developed its own AI chatbot, named CheggMate, in collaboration with OpenAI to better compete with ChatGPT. Rosensweig previously stated that CheggMate would be powered by ChatGPT and Chegg’s proprietary data to improve learning by making it more personalized, adaptive, accurate, fast, and effective.