DraftKings to Lay Off About 3.5 Percent of Its Workforce

By Matt Speakman,
Betting Expert at online-gambling.com

Matt Speakman Betting Expert at online-gambling.com

A die-hard fan of the Patriots, Matt Speakman is an expert on everything related to sports betting and DFS sites. Over the years, he has proven a valuable asset for our team at online-gambling.com. You can find Speakman's professional tips and tricks in any of his many articles on the website.

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Last updated: February 11, 2023

Recently, DraftKings announced that it will be laying off 140 employees, which is about 3.5 percent of its workforce. The sportsbook operator is doing this to cut costs. DraftKings did not mention the areas that may experience workforce cutbacks. It also did not mention the idea of filing a claim for lost earnings due to layoffs.

The gambling company did not state the locations where it shed the jobs. DraftKings has its headquarters in Boston and it also maintains an office in Las Vegas. However, it does not accept bets in Nevada.

The Layoffs at DraftKings Is Arriving at a Time When the Domestic Sports Calendar Enters One of Its Busiest Stretches

DraftKings’ decision to pare down its employees comes as the domestic sports calendar enters a busy stretch, indicating that the sportsbook operator sees value in cutting its workforce now rather than later. This is despite the operator posting revenue growth in 2022.

In a few weeks from now, the Super Bowl, which is the most bet-on sporting event in the US, will take place. The National Collegiate Athletic Association (NCAA) Tournament, commonly called March Madness, is also around the corner. Additionally, there is still a ton of regular-season NBA, NHL, and college basketball for bettors to embrace.

The announcement of DraftKings as regards reducing its workforce is coming ahead of the release of the fourth-quarter earnings reports of the company, scheduled for February 16. The operator may provide modified 2023 guidance during this. Most people believe DraftKings will become profitable at some point this year. Some of the analysts claim that the layoffs indicate management’s increasing emphasis on profitability and cost reductions.

Matt Farrell, CFA, a senior research analyst at Piper Sandler, mentioned that the layoffs could be beneficial given that investors expect profits from DraftKings. He continues by saying that the reduction in staff is also an indication that the management is placing priority on profitability. Matt Farrell assigns DraftKings an “overweight” rating with a price target of $15.

DraftKings Is Not the Only Company to Announce Staff Reduction

DraftKings’ announcement of layoffs is coming in advance of a very busy stretch of sports betting opportunities and also at a time when many US companies make a similar announcement. FedEx (NYSE: FDX) recently announced that it is slashing its director and officer team by more than 10%, a hint that the US economy may be in peril.

Rivian Automotive, a manufacturer of electric vehicles, said that it is eliminating 840 roles or 6% of its workforce. PayPal also recently announced that 2,200 jobs would be eliminated. A number of tech giants recently announced significant layoffs, including Microsoft, Amazon, Facebook parent Meta Platforms, and Google parent Alphabet.

The gaming industry has also been affected by this trend, and DraftKings is not the first company to have face some consequences out this. Bally’s Corp. announced last month that it would cut up to 15 percent of employees at its digital gaming unit as part of efforts to make the business profitable.