DraftKings and Polymarket Reportedly Cut Staff

DraftKings (NASDAQ: DKNG) and Polymarket are reportedly cutting staff as competition in prediction markets and sports betting has intensified recently.

DraftKings is believed to have laid off a group of employees last week, ahead of its third-quarter financial results. Some former employees confirmed this on social media, which suggests the report may be accurate. This round is reported to be the company's third layoff wave this year and its fourth since 2023.

Regarding the layoffs the Boston-based company carried out in February, some analysts estimated that up to 5% of its staff could be affected and that up to $30 million in annual savings could be achieved.

Polymarket also appears to have made layoffs. However, the reduction is reportedly not the 30% level suggested in some speculative reports. It has been suggested that the company may have reduced staff to resize itself ahead of a possible IPO. The company has not formally announced an IPO plan. Even so, early investors, a group that includes Donald Trump Jr. and Intercontinental Exchange (NYSE: ICE), are said to see an IPO as the most effective exit route.

The company reportedly raised $1 billion in August, and its valuation rose to $21 billion. Polymarket reached its highest trading volume in October. Most of this increase is reported to have come from the newly launched Polymarket US unit.

On the other hand, some early users who are enthusiastic about crypto believe the expectation that the company would issue its own token and distribute it to users may not materialize.