DraftKings conducts further layoffs in 2026 after cutting guidance

DraftKings Inc. cut an undisclosed number of jobs last week in at least its second wave of layoffs in 2026. The employee notifications arrived days before the company reported third-quarter results, when it lowered its adjusted EBITDA outlook for 2026 and announced cost programmes to streamline operations.

Cuts and official silence

The company notified affected employees last week, Front Office Sports reported. A DraftKings spokesperson told SBC Americas: "We’re not going to comment on personnel decisions." The exact size of the reduction was not disclosed by DraftKings and remains unknown against a workforce of approximately 5,500 employees at the end of 2025, according to The Boston Globe.

Third-quarter results and guidance revision

DraftKings reported third-quarter revenue of $1.33bn, a 16% year-on-year increase. However, the company cut its adjusted EBITDA guidance for 2026 to $175m–$275m, down from a prior forecast of $700m–$900m. DraftKings attributed much of the adjustment to an expected investment of $650m–$700m in its DraftKings Predictions product.

On the analysts' call, chief executive Jason Robins defended the headcount that helped build Predictions and stressed the focus on operational efficiency. Robins said the company had built the product "with mostly the same headcount that we have today" and added that they were "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."

"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," Jason Robins said on the earnings call.

DraftKings shares fell more than 29% on Friday morning after the adjustment, and were down 48% year-to-date by midday the following Monday.

Context of the industry layoff wave

The cuts at DraftKings add to a string of headcount reductions across the gaming industry in 2026, driven by taxes, prediction markets and investor expectations. Recent examples include:

• FanDuel cut a reported "hundreds" of jobs in June and reduced the FanDuel TV headcount by around 60% when it closed the linear network.

• International Game Technology plc (IGT) cut about 700 employees in March, roughly 10% of its global workforce.

• PENN Entertainment applied cuts of more than 75 employees in its Interactive division in May.

• Underdog let go of more than 100 employees in March, over 20% of its staff, while pivoting to a national prediction markets platform.

• bet365 confirmed roughly 340 layoffs in September at its European centres, about 3% of its workforce.

• Entain cut 500 roles in July, near 2% of its headcount.

• Flutter announced a restructuring in the UK and Ireland that could involve up to 1,400 job losses.

Professor Matthew Bidwell of The Wharton School at the University of Pennsylvania said the wave appears "sector specific" and noted that the overall economy’s layoff rate remains close to historic lows.

Views on why the layoffs are happening

Jeffrey Pfeffer, professor of organisational behaviour at the Stanford Graduate School of Business, downplayed the usual economic explanation for layoffs. 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." He added that layoffs "say little or nothing about business conditions and much about how companies treat their employees."

"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," Jeffrey Pfeffer said.

Prior workforce growth and expectations of further adjustments

DraftKings expanded its workforce substantially in recent years. Citizens Capital Markets and Advisory noted in February that DraftKings’ employee base grew 31%, or roughly 1,300 people, over three years. DraftKings confirmed earlier cuts in February 2026, when a spokesperson said the company decided to "reorganize some teams to better align their people with the most important priorities and areas of investment"; no figure was provided then either.

In February, Citizens analyst Jordan Bender estimated the round of cuts could reach around 5% of the workforce, saving roughly $30m a year, and suggested investors could expect further cost-structure rationalisation in subsequent quarters and years. Bender had also previously estimated DraftKings might cut as much as 20% of its headcount.

What remains to be confirmed

DraftKings has not disclosed the exact number of roles affected in the latest round. Front Office Sports described the scope as unclear beyond reference to "more than a handful" of employees who posted about their layoffs on social media. The company has tied the search for efficiency to its bet on prediction markets and the investment in DraftKings Predictions.