DraftKings Cut More Jobs Ahead of Q3 Earnings

DraftKings underwent layoffs this week, marking at least the third round of job cuts the company has made this year. It represents the latest in a broader wave of 2026 gambling industry layoffs from companies including FanDuel, Underdog, and PrizePicks.

The exact scope of the layoffs was not clear, although more than a handful of people have posted on social media about their jobs being eliminated. Front Office Sports spoke with two of the employees who were part of this week’s cuts, as well as one employee who was laid off in a prior round.

“DraftKings is not going to comment on personnel decisions,” a spokesperson for the company told FOS.

Affected employees in this week’s cuts worked in a range of areas, including customer experience, engineering, and legal. That’s not unusual for a company the size of DraftKings, which at the end of fiscal 2025 reported it had more than 5,500 employees. That was up from over 5,100 employees as of the end of fiscal 2024, and well above the more than 4,400 employees DraftKings reported at the end of fiscal 2023 (in 2023, it cut 3.5% of its workforce, with affected employees being primarily based outside the U.S.).

“As businesses build year over year, they take on extra fat, and at a certain point you need to cut,” said one gaming industry source who asked not to be identified due to the nature of their work. “It’s fair to assume layoffs will be one of the first levers they’d pull.”

There are likely more cuts on the horizon. Citizens analyst Jordan Bender has previously estimated DraftKings could stand to cut up to 20% of its workforce. He said that in a research note from several quarters ago.

The people let go this week were informed on Monday, according to two of the laid-off employees. DraftKings also cut jobs over the summer and in the spring, according to multiple sources and social media posts from affected employees.

This has been a year of significant layoffs in the gambling industry. In May, Penn Entertainment and Gambling.com Group had cuts (the latter has since changed its name to Grandstand). Underdog, PrizePicks, and FanDuel also had layoffs this year.

Analysts told FOS in May that the trend of job cuts in the industry could be attributed to the adoption of artificial intelligence and financial pressure from investors amid increasing competition from prediction markets.

‘Firmly focused on managing our cost structure’

The DraftKings cuts came ahead of the company releasing its third quarter results on Thursday. The company noted it remains “firmly focused on managing our cost structure.”

DraftKings also said that in the third quarter, its adjusted operating expenses—excluding prediction markets—declined year-over-year. “In 2027, we expect significant operating leverage in our core business driven by national marketing efficiencies as states mature and cost programs designed to optimize how we work.”

DraftKings lowered its fiscal 2026 revenue guidance to between $6.35 billion and $6.55 billion, from a range of $6.5 billion to $6.9 billion. But CEO Jason Robins expressed confidence moving forward, saying he expects an “exceptional” 2027. The company said it added more than one million prediction-market customers in the third quarter, and that it is now the “clear” number three exchange (behind Kalshi and Polymarket).

DraftKings said it expects its prediction-market business to generate hundreds of millions of dollars in gross revenue this year, although new customer promotions could offset roughly 90% of that amount, leaving net revenue close to neutral.

On Friday’s earnings call, Robins said the focus on growing DraftKings Predictions hasn’t come at the cost of its core business of traditional sports betting. “I don’t think we’re giving up an inch anywhere. We are laser focused on the core.”

DraftKings stock was trading down more than 29% Friday morning. Year-to-date, shares are down over 52%.

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