DraftKings allegedly cuts workforce as AI strategy takes over

• DraftKings has allegedly reduced its workforce, with analyst estimates suggesting headcount cuts could approach 5% of employees.
• The reported layoffs follow the company’s Q4 2025 earnings report, in which 2026 revenue guidance fell well below Wall Street expectations.
• CEO Jason Robins has flagged AI as a key driver of cost efficiency, including replacing roles that would previously have required new human hires.

DraftKings has allegedly laid off a number of employees in a restructuring move that comes shortly after the company posted disappointing 2026 revenue guidance.

Former employees disclosed the alleged departures through LinkedIn posts. The exact number of affected roles is yet to be confirmed by the company.

Financial backdrop

The alleged cuts follow DraftKings’ Q4 2025 earnings report, published earlier this month. Q4 revenue reached $1.99 billion, a 43% year-on-year increase that narrowly exceeded analyst estimates. Full-year 2025 revenue grew 27% to over $6 billion, representing the company’s first year of positive net income.

Despite those milestones, investors reacted negatively to DraftKings’ 2026 guidance. The company projected full-year revenue of between $6.5 billion and $6.9 billion, well below Wall Street’s consensus estimate of approximately $7.3 billion.

Adjusted EBITDA guidance of $700–$900 million also disappointed. Shares fell sharply following the announcement, declining from pre-earnings highs of around $47–$48 in September 2025 to approximately $21.96 as of 24 February 2026.

AI and cost reduction

Jordan Bender, analyst at Citizens, estimated the alleged headcount reduction could approach 5% of DraftKings’ employee workforce. Based on a median salary of roughly $100,000, he projected potential annual cost savings of around $30 million.

Bender also noted that the timing of the alleged cuts, approximately 10 days after the earnings release and forward guidance, suggests any savings were likely already incorporated into the company’s 2026 adjusted EBITDA guidance of $700 million to $900 million.

DraftKings has been open about its ambitions in AI-driven cost efficiency. CEO Jason Robins addressed the topic at the Bank of America Gaming, Lodging & Leisure Conference in September 2025.

“AI is transforming the way that we are going to potentially need or not need to grow our fixed costs going forward. The amount of efficiency I think we are going to generate on headcount and being able to basically place what would have been human hires with AI agents and also reduce in certain areas — I think over the next few years is going to be a big thing for us,” said Robins, CEO of DraftKings.

Internally, DraftKings uses AI to automate requests for proposals, support engineers with coding tasks, and deploy chatbots and preliminary legal opinion tools.

Workforce growth then reversal

Citizens noted that DraftKings’ employee base had grown by 31% — approximately 1,300 people — over the preceding three years.

The alleged restructuring would represent the first meaningful reversal of that expansion. The operator is also facing slowing revenue growth projections for 2026, with guidance implying an 11% increase at the midpoint, and further potential deceleration in 2027 given limited new US market legalisation on the horizon.

DraftKings is scheduled to host a virtual investor day on 2 March 2026, where further detail on strategy and medium-term financial targets is expected to be shared with analysts and shareholders. Official confirmation of the reported workforce reduction may also follow at that time.