Chegg and the AI Overviews shock
Photo: Chegg headquarters in Santa Clara, California (2019), Ixfd64 / Wikimedia Commons, licensed CC BY-SA 4.0.
For years, Chegg's formula was simple: students typed their homework question into Google, clicked a result, and paid to see the solution. In 2025, Google started answering the question right on the results page - and Chegg lost that click for good.
In February 2025, Chegg sued Google, arguing that AI Overviews answer questions directly on the SERP - after its non-subscriber traffic fell 49% in a single month. The company laid off 248 people (May 2025), then cut another 388 (October 2025) - losing most of its workforce within a year. It is the clearest example yet of what happens when your content is optimized only to rank, not to be cited by AI with your brand attached: you can be replaced entirely, right on the search results page.
Who is Chegg, and why was it so dependent on Google?
Chegg is an American edtech company best known for its homework Q&A service: students post questions and pay a subscription to see detailed solutions. The model lived off one nearly exclusive traffic source: Google search. Users typed "solve this differential equation" or pasted the whole question, saw a Chegg page ranking high, clicked through, and subscribed.
What happened when Google launched AI Overviews?
- AI Overviews answered instead of Chegg: for the same question, Google now generates the solution right in a summary box at the top of the page - no click required.
- Non-paying traffic collapsed fast: according to Chegg's financial reports, non-subscriber traffic fell 49% in January 2025, a sharp acceleration from just an 8% decline in Q2 2024.
- Chegg took Google to court: in February 2025, Chegg formally sued Google, alleging the company had turned a neutral search engine into an "answer engine" that favors its own AI-generated content over links to the open web.
Data source: Chegg Q4 2024 financial report, as covered by CNBC and MediaPost (February 2025).
The real cost: two rounds of layoffs in one year
The consequences did not stop at a traffic number. In May 2025, Chegg laid off 248 employees (22% of its workforce) and closed its US and Canada offices. Just five months later, in October 2025, it cut another 388 people (45% of the remainder). Management said the cuts would save up to 110 million USD in the next fiscal year, after reviewing strategic options (including a possible sale) and deciding to stay independent.
Is this just a Chegg problem?
No. A Pew Research Center study (July 2025) found that when a Google results page includes an AI Overview, users click a traditional result in only 8% of searches, versus 15% without the AI summary - nearly cut in half. Clicks on the links cited inside the summary box are rarer still: just 1%. In other words, any site that lives on pure search traffic - not just edtech - faces the same risk as Chegg, only to a different degree.
Ranking high on Google is no longer enough. If AI can fully answer the question right on the results page, users have no reason to click - unless your content is distinctive enough (proprietary data, a brand people search for by name, an experience that can't be summarized) that they seek you out, or the AI cites you by name. That is exactly the problem GEO solves.
Read the foundational piece What is GEO for the full concept, and the Vietnamese guide on hands-on GEO optimization to avoid repeating Chegg's story with your own business.
Frequently asked questions
Why did Chegg sue Google?
In February 2025, Chegg sued Google, alleging that AI Overviews answer questions directly on the search results page, so students no longer need to click through to Chegg for solutions - collapsing the company's traffic and revenue.
How much did Chegg's traffic drop because of AI Overviews?
Chegg's non-subscriber traffic fell 49% in January 2025, a sharp acceleration from an 8% year-over-year decline in Q2 2024, according to the company's own financial reports.
How many employees did Chegg lay off after this shock?
In May 2025 Chegg laid off 248 people (22% of staff) and closed its US and Canada offices. In October 2025 it cut another 388 people (45% of the remainder) - losing most of its workforce within a single year.