DraftKings is restructuring some roles, resulting in layoffs, as the sports betting giant tightens operations amid growing competition from prediction markets and the continued implementation of AI, which is modifying work dynamics.
The company is reorganizing portions of its workforce, a move that analysts say could result in the reduction of up to 5% of its employees as the operator seeks to manage operating costs more efficiently amid shifting industry dynamics.
Citizens Equity Research analyst Jordan Bender told clients that DraftKings confirmed it is undergoing a reorganization that affects some employees, though the company did not provide additional details.
Bender estimated that if the headcount reduction approaches 5%, the company could realize annual savings of approximately $30 million, based on a median employee salary of about $100,000, according to company filings.
“That said, the timing of the staff reduction, a week and a half following earnings and guidance, suggests the cost savings were most likely contemplated in the 2026 EBITDA guidance of $700 million to $900 million EBITDA,” Bender added.
The forecast referenced by Bender was issued shortly after the company reported fourth-quarter results. Earlier this month, DraftKings disclosed that revenue rose 43% to nearly $2 billion in the fourth quarter, while adjusted earnings per share more than doubled to 36 cents.
The company projected that revenue growth would slow to roughly 14% this year. Despite ongoing revenue and profit expansion, shares of DraftKings have declined 36% so far this year.
DraftKings, which operates online sports betting in 26 states and pays state-level taxes that include 20% in Massachusetts and 50% in Illinois, has faced intensifying competition from prediction markets.
These platforms, including Kalshi and Polymarket, contend they are regulated under federal law rather than state gambling frameworks and are seeking to offer event-based contracts nationwide without paying state wagering taxes. Several states have filed lawsuits aimed at preventing such activity.
In response to the evolving competitive environment, DraftKings has introduced its own prediction market offerings in jurisdictions where it does not provide state-regulated sports betting.
Analysts noted that the company’s recent workforce changes come at a time when it is adjusting to both cost pressures and the new business line. General and administrative expenses at DraftKings increased by 6%, 13%, and 22% from 2023 through 2025, respectively. Over the same period, product and technology costs rose at an average rate of 20%.
Artificial intelligence has also drawn attention in connection with the restructuring, although DraftKings did not cite AI as a reason for the job cuts. Last year, chief executive Jason Robins said his company would be “able to basically replace what would have been human hires with AI agents and also reduce [workers] in certain areas as well.”
Bender said the company has expanded its use of AI across multiple internal and external functions. “Internally, the company has adopted AI functions to help write RFPs, help engineers to write code, add in chatbots, and draft legal opinions, all which can save on outsourced labor over time,” says the analyst.
“Externally, AI is improving its ability to serve content in a personalized manner. For example, 70% of promotional spending is determined by AI, which should increase over time. Overall, we could expect more cost structure rationalization in the coming quarters and years as the business continues to benefit from AI and maturing markets.”
In a statement on Tuesday, the company addressed the reorganization. “DraftKings has decided to reorganize some teams to better align their people with the most important priorities and areas of investment for the company,” the company said. “Unfortunately, these changes will impact some roles across the organization.”
The Boston-based operator employed 5,500 people across 13 countries at the end of 2025. The company is scheduled to relocate its headquarters from Back Bay to Boston’s financial district next year and plans to occupy approximately 125,000 square feet, similar to the footprint of its current office. In 2023, the company eliminated 140 positions, representing about 3.5% of its global workforce at the time.
Original article: https://www.yogonet.com/international/news/2026/02/25/117764-draftkings-cutting-jobs-as-betting-giant-deals-with-rising-costs-and-competitive-pressure
