DraftKings Makes Fresh Layoffs and Lowers Its Outlook

DraftKings carried out a new round of layoffs shortly before releasing its third-quarter financial results. The company did not disclose how many employees were affected. According to reports, positions in customer experience, engineering and legal were eliminated, and some former employees shared their departures on social media.

The company generated $1.33 billion in revenue in the third quarter, up 16 percent year over year. However, its full-year revenue forecast was lowered from a range of $6.5-6.9 billion to $6.35-6.55 billion. The adjusted EBITDA forecast was also reduced, from $700-900 million to $175-275 million.

DraftKings plans to invest $650-700 million in its prediction market business in 2026. CEO Jason Robins said the prediction product was developed largely with existing employees, which he said was possible through artificial intelligence and other efficiency initiatives. It was reported that 1.6 million customers have interacted with the product so far this year, and that the company is the third-largest exchange after Kalshi and Polymarket. Management expects promotional spending on new customers to offset most of the gross revenue. Robins also said this expansion does not change the company's focus on traditional sports betting.