Chegg, once one of online education’s biggest pandemic-era winners, has lost more than 99% of its peak market value as students turn to ChatGPT and other generative AI tools for instant, low-cost academic support.
TL;DR
- Chegg’s market value has fallen from roughly $14 billion at its peak to about $109 million.
- First-quarter 2026 revenue dropped 48% year over year to $63.3 million.
- The company cut hundreds of jobs after blaming AI and falling Google traffic.
- Chegg remains operational and is rebuilding around workplace skilling and AI courses.
Chegg’s Market Value Collapses
Chegg is not officially dead, but its decline makes it one of the clearest examples of an established digital business being disrupted by generative AI.
The company’s market capitalization stood at about $109.1 million on July 24, 2026. Historical data shows Chegg approached $14 billion at its height, meaning more than 99% of its equity value has disappeared.
The contrast with its pandemic-era performance is stark. In the first quarter of 2021, Chegg reported 64% subscriber growth, reaching a record 4.8 million quarterly subscribers.
It ended that year with 7.8 million subscribers, while Chegg Services revenue reached $670 million.
Chegg’s shares were offered at $102 each in a February 2021 public offering. They were trading below $1 in July 2026, showing how dramatically investors have reassessed the business.
ChatGPT Changes Chegg’s Trajectory
ChatGPT’s arrival changed the company’s trajectory.
In May 2023, then-CEO Dan Rosensweig acknowledged that students were rapidly adopting OpenAI’s chatbot.
“Since March we saw a significant spike in student interest in ChatGPT,” Rosensweig said, adding that it was affecting Chegg’s new-customer growth rate.
Students who previously paid for access to Chegg’s library of educational answers could now ask generative AI tools for explanations, summaries and step-by-step assistance without leaving a chatbot.
Google AI Search Adds More Pressure
The threat expanded as Google introduced AI-generated answers directly into search results.
Chegg argued that these summaries reduced the need for users to visit websites containing the original material, weakening a customer-acquisition channel on which it depended.
Chegg sued Google in February 2025, alleging that AI Overviews unfairly retained traffic and used publisher content to create competing answers.
Google rejected the accusation and said its AI features continued to send users to a broad range of websites.
Chegg Cuts Hundreds Of Jobs
The damage soon appeared in Chegg’s workforce and financial results.
In May 2025, the company announced 248 layoffs, affecting around 22% of its workforce. It followed with a larger restructuring in October, eliminating 388 roles, or approximately 45% of employees.
“The new realities of AI and reduced traffic from Google to content publishers have led to a significant decline in Chegg’s traffic and revenue,” the company said.
The restructuring was designed to reduce costs and give Chegg more room to invest in areas that management believes have stronger growth potential.
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Revenue Falls 48% In Q1 2026
Chegg’s first-quarter 2026 revenue fell 48% year over year to $63.3 million.
Academic Services generated $45.7 million, with traffic remaining under pressure, while Chegg Skilling revenue rose 9% to $17.6 million.
Still, Chegg posted net income of $0.2 million, its first positive quarterly result in two years, and adjusted EBITDA of $15.5 million.
The company has been heavily damaged, but not wiped out.
“Q1 was a strong quarter,” said Rosensweig, who returned as CEO and executive chairman. “The foundation for future growth is now in place.”
Chegg Pivots To Workforce Skilling
Chegg’s survival plan is to shift away from its legacy homework-help model and focus on professional language learning, workplace readiness and AI-related skills.
It believes the skilling market represents an opportunity worth more than $40 billion and expects double-digit unit revenue growth in 2026.
Whether that reinvention succeeds remains uncertain.
What is clear is that AI did not merely create a competitor for Chegg. It changed how students find answers, how search engines distribute information and how much consumers are willing to pay for educational assistance.
