Chegg Inc (NYSE:CHGG) shares are trading higher Tuesday after the company announced a restructuring plan as it refocuses its strategy around its core audience.

What Happened: After the market close on Monday, Chegg announced a restructuring plan including a 23% headcount reduction, a new brand and marketing strategy and a dedication of more resources to its international program.

Chegg said it will refocus on students with a comprehensive course load who are seeking positive learning outcomes. The company plans to diversify its distribution channels and execute on its strategy by reaching students in high school and earlier in college.

"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, president and CEO of Chegg.

"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."

Chegg expects the restructuring to save the company between $40 million and $50 million in 2025. The company said it remains committed to achieving adjusted EBITDA margin of 30% or greater in 2025 and believes it can deliver at least $100 million in free cash flow next year. Chegg also reiterated its second-quarter guidance from April.

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CHGG Price Action: Chegg shares were up 18.7% at $3.09 at the time of publication, according to Benzinga Pro.

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