DraftKings Cut More Jobs Ahead of Q3 Earnings
It’s at least the third round of layoffs for DraftKings this year.
DraftKings has conducted yet another round of job cuts, marking the company's third reduction in workforce this year. This action is part of a broader trend of layoffs in the gambling industry, including recent cuts at FanDuel, Underdog, and PrizePicks. The precise number of employees affected remains undisclosed, but at least one person confirmed the eliminations on social media.
A spokesperson for DraftKings declined to comment on personnel decisions. Affected staff in this latest round worked across various departments, such as customer experience, engineering, and legal. As DraftKings, which reported over 5,500 employees at the end of fiscal 2025, continues to expand, industry insiders suggest that layoffs may be necessary at some point.
One analyst projects that DraftKings could cut up to 20% of its workforce. The recent layoffs occurred at the company's announcement of its third-quarter earnings, with affected employees informed on Monday. This is not the first time DraftKings has downsized in recent months, having shed positions during the summer and spring. The gambling industry has witnessed substantial layoffs this year, with Penn Entertainment, Gambling.com Group (now Grandstand), Underdog, PrizePicks, and FanDuel also experiencing workforce reductions.
Analysts attributed the trend to the integration of artificial intelligence and financial pressure from investors due to heightened competition. DraftKings, in a proactive stance, stated that it remains committed to managing its cost structure. The company lowered its fiscal 2026 revenue guidance to between $6.35 billion and $6.55 billion, down from the previous range of $6.5 billion to $6.9 billion.
CEO Jason Robins expressed optimism for 2027, predicting exceptional growth. Despite the recent cuts, DraftKings added over a million prediction-market customers in the third quarter and anticipates generating hundreds of millions in gross revenue this year from its prediction-market business. However, new customer promotions may offset about 90% of this revenue, leaving net revenue close to neutral.
On Friday's earnings call, Robins emphasized that the company's focus on the prediction-market business has not compromised its core sports betting operations. DraftKings stock experienced a decline of more than 29% on Friday morning, with the year-to-date performance down over 52%.
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