Major U.S. sports betting, iGaming, and prediction market operator DraftKings has undergone an employee restructuring and reduction that one analyst projects could save the company $30 million annually.
Key Takeaways
- DraftKings confirmed a company restructuring on Tuesday.
- It’s projected that the gaming operator’s employee reduction was on the low end of a technology company range.
- DraftKings has made major investments in the prediction market space.
After multiple employees from various segments within the company posted on social media that they had been laid off, DraftKings confirmed changes on Tuesday.
“DraftKings has decided to reorganise some teams to better align their people with the most important priorities and areas of investment for the company,” a company spokesperson told The Boston Globe. “Unfortunately, these changes will impact some roles across the organisation. The company believes that while these decisions are difficult, they are necessary to best position them for future growth.”
Citizens investment analyst Jordan Bender expects that the employee reduction percentage was on the lower end of the 2% to 15% range that’s affected technology companies in recent years. Bender said that if 5% of DraftKings’ workforce was let go, the company wouldn’t have to pay out $30 million, based on a $100,000 salary median.
This is the second time in three years that DraftKings has made cuts. In 2023, the company laid off 3.5% of its employees.
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Cuts baked in?
The Boston-based gaming operator made the staff changes less than two weeks after its latest earnings announcement, which revealed a 43% year-over-year revenue increase in the fourth quarter of 2025.
Bender said DraftKings has seen its general and administrative expenses grow from 6% to 13% to 22% year-over-year from 2023 through 2025. Product and technology went from 12% to 26%, while sales and marketing grew from 3% to 9% “despite slowing legalization and player growth.”
DraftKings projected 2026 revenue to reach $6.5 billion to $6.9 billion for the year with Adjusted EBITDA in the $700 million to $900 million range. Because of the timing, Bender believes that the layoffs were “most likely contemplated” in DraftKings’ 2026 estimates.
“On one hand, we can take the view that cost savings will act as a cushion baked into guidance, while on the other hand, it will work as an offset for the increasing fixed costs stemming from the launch of DraftKings Predictions,” Bender wrote in a note to investors.
Stock is down 56% from a 52-week high, and DraftKings was selling at around $22.40 per share on Wednesday.
Future moves
DraftKings launched its prediction market platform in December 2025, and with the legalization of sports betting significantly slowed following the addition of Missouri late last year, the gaming operator is expected to be shifting some of its focus and intent in the prediction industry.
The company plans to move its Predictions infrastructure to Railbird, a federally regulated derivatives trading exchange DraftKings acquired in 2025, as it prepares to compete more in that space with upcoming sporting events like March Madness and the World Cup.
DraftKings has also emphasized Artificial Intelligance, using the technology in various areas, Bender said. AI is at the forefront of employee decisions now and moving forward.
“We believe the current round of restructuring could have been larger or more impactful for the model if not for the push into prediction markets based on the CEO’s push to implement AI throughout the organization for internal and external functions,” Bender wrote. “Overall, we could expect more cost structure rationalization in the coming quarters to years as the business continues to benefit from AI and maturing markets.”
