DraftKings carries out additional layoffs as Q3 guidance is reset

DraftKings cut an undisclosed number of jobs last week, marking at least its second round of layoffs in 2026 and arriving days before it reported third-quarter results on 9 November 2026. The company reduced its full-year 2026 adjusted EBITDA guidance to a range of $175m to $275m from $700m to $900m, a reset that reflected a planned $650m to $700m investment in DraftKings Predictions.

What happened and when

Last week DraftKings notified affected employees of job losses; the company declined to disclose the size of the reduction. A DraftKings spokesperson told SBC Americas, "We're not going to comment on personnel decisions." Front Office Sports described the scope as unclear beyond the "more than a handful" of employees who posted about their layoffs on social media. The timing coincided with DraftKings' third-quarter report published on 9 November 2026.

Financial backdrop and guidance change

DraftKings reported third-quarter revenue of $1.33bn, up 16% year over year. Management cut 2026 adjusted EBITDA guidance to $175m–$275m, down from a previous range of $700m–$900m. Company executives attributed the reset primarily to a planned $650m–$700m investment in the company's prediction markets product, DraftKings Predictions.

During the earnings call, DraftKings CEO Jason Robins said the Predictions product was built "with mostly the same headcount that we have today" and pointed to efficiency gains tied to AI. He told analysts, "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. 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 the recent layoffs directly.

Investor reaction was swift: DraftKings shares fell more than 29% on Friday morning following the guidance cut and were down 48% year-to-date as of the Monday afternoon after the report.

Context: industry-wide layoffs and causes in 2026

The reported DraftKings reductions are part of a broader wave of 2026 layoffs across the gambling and gaming sector. Notable reported moves this year include:

• FanDuel reportedly cut "hundreds" of jobs in June and reduced FanDuel TV headcount by roughly 60% as it wound down the linear network.

• IGT cut about 700 employees in March, roughly 10% of its global workforce, as it aligned legacy IGT and Everi businesses after an 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.

Tax increases in the United Kingdom have underpinned several large cuts: bet365 confirmed about 340 layoffs across its European hubs in September, roughly 3% of its workforce; Entain cut 500 roles in July, about 2% of its workforce; and Flutter announced a restructuring in the UK and Ireland that could produce up to 1,400 redundancies, citing the tax hikes.

Academic perspectives on layoffs

Jeffrey Pfeffer, a professor of organizational behavior at the Stanford Graduate School of Business, told SBC Americas that research suggests layoffs have become routine and often spread by imitation rather than as direct responses to economic pressure. He said, "Layoffs, over the years, have become relatively routine as ties between employers and employees have weakened. 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."

Matthew Bidwell, an economics professor at the University of Pennsylvania's The Wharton School, described the 2026 wave as "sector specific." He noted that the broader economy is not experiencing a comparable layoff rate and that government measures show the layoff rate near historic lows.

DraftKings' workforce history and previous reductions

DraftKings 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 DraftKings' employee base grew 31%, or about 1,300 people, over three years.

DraftKings confirmed an earlier round of cuts in February 2026 but did not disclose numbers then either. At that time a spokesperson said the company had decided "to reorganize some teams to better align their people with the most important priorities and areas of investment." Citizens analyst Jordan Bender estimated the February round could reach about 5% of the workforce, saving roughly $30m per year, and suggested the reduction was toward the lower end of a 2%–15% range common among technology companies. Bender previously wrote that DraftKings could cut up to 20% of its workforce, an estimate he made before subsequent rounds.

What DraftKings has said and not said

DraftKings did not provide a headcount figure for last week's cuts. The company framed its cost actions in public statements and the earnings call around optimising efficiency and investing in DraftKings Predictions, but declined to comment on specific personnel moves when contacted by SBC Americas.

"We're not going to comment on personnel decisions," a DraftKings spokesperson told SBC Americas.

The company has explained the 2026 guidance reset as mainly driven by the Predictions investment of $650m–$700m and emphasised a focus on making its cost structure "as efficient and lean as possible."