DraftKings Cuts Workforce As AI Integration Deepens

DraftKings is reorganising parts of its business based on LinkedIn posts from former employees who were laid off without prior notice. Individuals from software engineering, recruitment and other departments confirmed their departures and stated they are seeking new roles.

A company spokesperson addressed the changes in a statement. “DraftKings has decided to reorganise some teams to better align their people with the most important priorities and areas of investment for the company.

“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.”

However, DraftKings’ careers page currently lists around 80 open positions across various functions. The workforce adjustments follow reports of strong financial performance in 2025 by the CEO.

Strong Results Contrast With Market Reaction

Co-founder and CEO Jason Robins stated in the announcement that fourth quarter revenue rose 43% year-on-year, delivering record revenue and adjusted EBITDA. He also mentioned hat the business entered 2026 with positive momentum.

Investor sentiment has moved in the opposite direction. DraftKings shares have fallen sharply since September 2025. The stock traded at around $47.91 at the beginning of that month, but had declined to $21.81 by February 24th.

In a note to investors, Jordan Bender of Citizens estimated that the headcount reduction could reach about 5% of total employees. His calculations were based on a median salary of roughly $100,000 to project annual cost savings of around $30m.

Bender wrote that the timing of the layoffs, roughly 10 days after earnings and forward guidance, suggests the anticipated savings were likely factored into the company’s 2026 EBITDA outlook of $700m to $900m.

Focus Shifts Toward Prediction Markets

The restructuring comes shortly after the December launch of DraftKings Predictions, the company’s entry into event-based trading.

Management is transitioning infrastructure to Railbird as its primary exchange. The move is in preparation for popular sporting events such as March Madness, the World Cup and the 2026 NFL season.

Competition in event-based markets has intensified with more operators and exchanges entering the space. DraftKings is expected to provide additional detail on its long term plans during its investor day scheduled for 2 March.

Artificial Intelligence Embedded Across Operations

Artificial intelligence has become a core element of DraftKings’ operating model. Over the past two years, management discussions have repeatedly referenced enterprise-level AI deployment.

Internally, the company applies AI to automate requests for proposals and support software engineers with coding assistance. Chatbots and preliminary legal review tools are also part of the system. These applications are aimed at reducing reliance on outsourced labour.

On the customer side, artificial intelligence guides promotional strategy and engagement efforts. About 70% of promotional spending decisions are currently determined by AI models. The company views this approach as a way to improve personalisation and promotional efficiency. 

Bender indicated that further cost adjustments could follow as automation expands and market conditions evolve. 

Though cost efficiency might support margins, additional workforce reductions are still a possibility as the company continues making strategic changes.