Chegg (CHGG) to Boost Growth With New Restructuring Plan

Core Viewpoint - Chegg is implementing a restructuring plan aimed at reducing its global headcount by 23% to enhance efficiency, speed up innovation, and align expenses with revenue trends [1][16]. Company Strategy - The company plans to simplify its systems and processes by leveraging partnerships for non-core applications [1]. - Chegg aims to provide a holistic and differentiated educational platform for students, utilizing artificial intelligence and a proprietary learning model [6][15]. - The restructuring is expected to yield non-GAAP expense savings of $40 million to $50 million by 2025, with a target adjusted EBITDA margin of over 30% and free cash flow of at least $100 million for the year [12]. Financial Performance - Chegg's shares have dropped 77% year-to-date, contrasting with a 13.3% growth in the Zacks Internet - Software industry [2]. - The company has seen a decline in its Subscription Services product line due to a drop in paying subscribers [2]. - The Zacks Consensus Estimate for Chegg's 2024 earnings has decreased from $1.10 to $0.99 per share, indicating a 10% decline from the previous year [7]. Market Position - Chegg is focusing on enhancing student learning outcomes and support through a comprehensive course load and diversifying distribution channels [19]. - The company is also investing in its international program, targeting six specific countries [19].