KEY TAKEAWAYS
- DraftKings cut an undisclosed number of jobs last week, at least its second round of layoffs in 2026.
- The cuts arrived days before a third-quarter report in which DraftKings slashed 2026 profit guidance and pledged “cost programs designed to optimize how we work.”
- DraftKings declined to comment, leaving the size of the reduction unknown against a workforce of approximately 5,500 at the end of 2025.
DraftKings cut more jobs last week, the latest in a run of 2026 layoffs across a gaming industry squeezed by taxes, prediction markets and investor pressure.
The company notified affected employees last week, just days before it reported third-quarter results, according to Front Office Sports.
A DraftKings spokesperson told SBC Americas: “We’re not going to comment on personnel decisions.”
The number of people who lost jobs remains unknown. DraftKings did not disclose a figure, and FOS described the scope as unclear beyond the “more than a handful” of employees who posted about their layoffs on social media. The cuts come as executives talk about optimizing efficiency moving forward against increasing industry headwinds following years of staff growth.
Q3 guidance cut puts DraftKings costs under a microscope
The timing lines up with a company asking investors to trust a costly bet on prediction markets.
DraftKings reported third-quarter revenue of $1.33bn last week, up 16% year over year, but cut its 2026 adjusted EBITDA guidance to $175m to $275m from $700m to $900m. The reset primarily reflects a $650m to $700m investment in DraftKings Predictions.
During last week’s earnings call, CEO Jason Robins told analysts the company built its Predictions product “with mostly the same headcount that we have today” and emphasized efficient operations.
“I think that speaks to a lot of the efficiency we’re seeing from AI and other sorts of things that we’ve been able to do,” Robins said. “We’re very much focused on how we can continue to make our cost structure as efficient and lean as possible, both in terms of fixed costs, but also how we think about the entire P&L and every dollar we spend.”
Robins did not address layoffs directly. Investors did not buy the broader pitch, as DraftKings shares fell more than 29% Friday morning and stood down 48% year-to-date as of Monday afternoon.
While DraftKings did not offer confirmation or a rationale, companies often frame cuts as a response to business conditions. But Jeffrey Pfeffer, a professor of organizational behavior at the Stanford Graduate School of Business, said research suggests otherwise.
“Layoffs, over the years, have become relatively routine as ties between employers and employees have weakened,” Pfeffer told SBC Americas. “There is some research evidence from a while ago that layoffs are NOT a response to economic pressure but rather are sort of like fashion — they diffuse through social networks of companies as they imitate each other.
“As such, layoffs say little to nothing about business conditions but a lot about how casually companies treat their employees.”
Gaming layoffs in 2026 follow different pressures
The reported DraftKings layoffs are the latest in a long string of workforce reductions at gambling companies in 2026.
U.S. cuts were more often pegged to strategic pivots:
- FanDuel cut a reported “hundreds” of jobs in June, weeks after a CEO change, and earlier announced a roughly 60% reduction at FanDuel TV as it winds down the linear network.
- IGT cut about 700 employees, roughly 10% of its global workforce, in March to align the legacy IGT and Everi businesses post-acquisition.
- PENN Entertainment reportedly cut more than 75 Interactive employees in May.
- Underdog parted ways with more than 100 employees in March, more than 20% of its workforce, as it shifted from state-by-state sports betting to a national prediction markets platform.
Matthew Bidwell, an economics professor at the University of Pennsylvania‘s The Wharton School, said the wave of layoffs appears to be “sector specific.”
“Contrary to how many people feel, we are not seeing a lot of layoffs in the broader economy at the moment,” Bidwell said. “The layoff rate as measured by government surveys is pretty close to a historic low. There have been some high-profile layoffs from tech companies, and there are real worries that AI adoption could spur a layoff wave in coming months and years, but there is little sign of one as yet.”
Tax increases in the United Kingdom underpinned several of the largest cuts:
- bet365 confirmed about 340 layoffs across its European hubs in September, or roughly 3% of its workforce, citing a competitive environment and higher regulatory and tax costs.
- Entain moved in July to cut 500 roles, about 2% of its workforce, as it worked to offset the UK tax increase.
- Flutter announced a restructuring of its UK and Ireland business that could produce up to 1,400 redundancies, citing the tax hikes.
DraftKings workforce grew significantly over three years
DraftKings spent recent years adding people.
The company employed roughly 5,500 people across 13 countries at the end of 2025, according to The Boston Globe. Citizens Capital Markets and Advisory noted in February that the DraftKings employee base grew 31%, or about 1,300 people, over three years.
DraftKings last confirmed cuts in February, when a spokesperson told SBC Americas the company decided “to reorganize some teams to better align their people with the most important priorities and areas of investment.” It did not say how many roles it eliminated then, either.
Citizens analyst Jordan Bender estimated at the time that the February round could reach about 5% of the workforce, saving roughly $30m per year, the Globe reported. Bender expected that round to land toward the lower end of the 2% to 15% range common at technology companies, and he wrote that investors “could expect more cost structure rationalization in the coming quarters to years as the business continues to benefit from AI and maturing markets.”
Bender also previously estimated DraftKings could stand to cut up to 20% of its workforce.
