Why did Chegg's operating expenses surge in Q2 2024?

Chegg's operating expenses surged in Q2 2024 due to several factors: 1. **Subscriber Declines and Weaker Guidance**: Analysts cut price targets and estimates for Chegg due to concerns over subscriber declines and weaker-than-expected Q2 guidance. The company reported a decrease in subscribers, with numbers dropping by 8.1% to 4.66 million. This decline in subscribers, possibly due to the impact of AI-enhanced chatbots like OpenAI's ChatGPT, led to a 9% decrease in subscription services revenue and an 8% drop in subscriber numbers. 2. **Cost-Cutting Measures**: Chegg announced a restructuring plan that included cutting 23% of its global workforce, which amounted to roughly 441 employees. This move was part of a broader strategy to streamline operations and reduce costs. The company anticipated saving between $40 million and $50 million in non-GAAP expenses by 2025. However, the restructuring also entailed significant charges, with the company expecting to incur between $10 million to $14 million in related expenses, with about half of these costs hitting in the second quarter and the rest by the end of 2024. In summary, Chegg's operating expenses surged in Q2 2024 primarily due to the restructuring plan and the decline in subscribers, which together led to a significant increase in cost-cutting measures and related charges.