DraftKings has carried out another round of layoffs shortly before reporting third-quarter earnings and reducing its 2026 financial outlook.
The company has not disclosed how many employees were affected. Reports indicate that the cuts included roles in customer experience, engineering and legal, while several former employees discussed their departures on social media.
A DraftKings spokesperson said:
“We’re not going to comment on personnel decisions.”
DraftKings employed more than 5,500 people at the end of 2025, compared with more than 5,100 a year earlier and over 4,400 at the end of 2023. The latest reductions follow other job cuts reported during 2026.
Lower Guidance Puts More Focus on Costs
DraftKings reported third-quarter revenue of $1.33 billion, up 16% year-on-year, but lowered full-year revenue guidance to between $6.35 billion and $6.55 billion from a previous range of $6.5 billion to $6.9 billion.
Adjusted EBITDA guidance was also reduced to $175 million to $275 million from $700 million to $900 million, largely because of planned spending on DraftKings Predictions.
The company expects to invest between $650 million and $700 million in the prediction markets business during 2026.
In its Q3 update, DraftKings said it remained “firmly focused on managing our cost structure” and expected greater operating leverage in 2027 through marketing efficiencies and “cost programs designed to optimize how we work.”
CEO Jason Robins said the Predictions product had been developed largely with the company’s existing workforce.
“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 directly address the layoffs during the call.
Predictions Investment Weighs on 2026 Results
DraftKings said more than 1.6 million customers had engaged with Predictions year-to-date, and the company described itself as the third-largest exchange behind Kalshi and Polymarket.
Management expects the product to generate substantial gross revenue in 2026, although promotional spending on new customers is expected to offset most of that amount.
Robins said the expansion had not changed the company’s attention to traditional sports betting.
“I don’t think we’re giving up an inch anywhere. We are laser focused on the core.”
For 2027, DraftKings expects revenue of $7.35 billion to $7.75 billion and adjusted EBITDA of $800 million to $1 billion. Predictions revenue is forecast at $650 million to $750 million.
Shares fell sharply after the Q3 report, with the supplied reports showing declines of more than 20% immediately following the results and a year-to-date fall of close to 50%.
Gambling Companies Continue to Reduce Staff
DraftKings’ cuts come during a year of wider workforce reductions in the gambling sector.
FanDuel reportedly eliminated hundreds of positions, while IGT cut about 700 jobs. PENN Entertainment reduced staff in its Interactive division, and Underdog cut more than 100 employees as part of its move toward prediction markets.
European operators have also announced reductions. bet365, Entain and Flutter linked some of their cuts to higher UK taxes, regulatory costs and restructuring.
Matthew Bidwell of the University of Pennsylvania said the pattern appeared more specific to gambling than to the wider labor market.
Jeffrey Pfeffer of Stanford University offered a broader view of corporate layoffs.
“Layoffs, over the years, have become relatively routine as ties between employers and employees have weakened,” Pfeffer said, as SBC Americas reports. “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.”
DraftKings has not provided a headcount figure for the latest reductions. Its public comments have instead focused on cost discipline as it commits substantial spending to Predictions and works toward its 2027 targets.