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Chegg, Inc. (NYSE:CHGG) shares are trading higher Monday after the company announced a restructuring plan and new vision for growth.
The Details: The restructuring plan will include a 23% headcount reduction, a refocus on students with a comprehensive course load and dedication of more resources to its international program.
The company also said it will execute a new brand and marketing strategy, including reaching students in high school and earlier in college, diversify distribution channels and simplify systems and processes.
The company expects to realize non-GAAP expense savings of $40 million to $50 million in 2025 from 441 employee departures, the closure of two offices outside of the U.S., as well as other cost rationalizations.
Chegg expects to incur a $10 million to $14 million charge related to the restructuring, with roughly half in the second quarter, and substantially the charges will be incurred by the fourth quarter of 2024.
"Today, we executed a restructuring effort, a major step in my plans to refocus Chegg and return to subscriber and revenue growth,” said Nathan Schultz, Chegg president and CEO.
“These changes are designed to make us a more focused, more efficient, uncomplicated, and quicker-moving company. Our renewed focus on our core audience — the student — will allow us to address an unmet need with an offering that is differentiated, holistic, and verticalized for education.”
CHGG Price Action: According to Benzinga Pro, Chegg shares are up 23.56% after-hours at $3.23 at the time of publication Monday.
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Posted In: CHGG
