DraftKings is expected to announce layoffs amid steady AI adoption

• DraftKings is planning a circa 5% reduction of headcount, with some analysts highlighting the correlation between AI adoption and the expected layoffs
• AI is not explicitly attributed to the job layoffs, but DraftKings is expected to save up to $30m annually
• The last time DraftKings enacted layoffs was back in 2023

One of America’s leading sportsbooks and gaming companies has announced a new round of layoffs designed to generate savings as the company is restructuring towards a leaner operation.

DraftKings could be digging deeper into Artificial Intelligence (AI), allowing it to reliably trim its workforce without disrupting its business, while also saving around $30m every year.

DraftKings is possibly looking into layoffs plans

This is the second time DraftKings is expected to announce layoffs in almost as many years, with the last such move taking place in 2023. Just how many people would be affected is not immediately clear, but the company could be slashing as much as 5% of its current staff.

Back in February 2023, DraftKings reduced its headcount by 3.5%, or 140 workers.

The news was also confirmed by Jordan Bender, an analyst at Citizens Equity Research, who said that the company is restructuring itself and the layoffs are expected to be enacted around the same time the Q4 results and 2026 EBITDA guidance have been published.

In a statement, Bender said: "We estimate the headcount reduction, if close to 5% of employees, will result in annual cost savings of ~$30M, based on the median DraftKings employee making ~$100k per year," says Bender, citing company filings. "That said, the timing of the staff reduction, a week and a half following earnings and guidance, suggests the cost savings were most likely contemplated in the 2026 EBITDA guidance of $700 million to $900 million EBITDA."

AI adoption in the company continues to increase

While the AI is not explicitly attributed to the reduction of headcount, Bender has commented on several areas where the technology has proven to be worthwhile and to actually reduce costs.

Areas such as coding, chatbots, and drafting legal opinions have now been made simpler thanks to generative AI. Another area in the company’s business where the technology has clearly shone is promotional spending, with 70% of the budget determined by AI.

"Overall, we could expect more cost structure rationalization in the coming quarters and years as the business continues to benefit from AI and maturing markets," Bender said.

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