DraftKings has confirmed it has reduced its workforce. DraftKings layoffs of around 140 employees follow an internal reorganization designed to keep compensation expenses flat year-over-year.
DraftKings layoffs hit with 140 job cuts
DraftKings has undergone personnel changes affecting employees in Ukraine, with a significant number of cuts being made in its Eastern European operations. The company is focused on improving operational efficiency, as investors continue to closely monitor the profitability of leading sports betting operators in the United States.
The company’s focus on operational efficiencies has led to a constant evaluation of their teams, to ensure alignment with future goals. Some teams have been reorganized as part of the process, resulting in the elimination of approximately 140 roles.
Previously, the American gaming operator had announced the discontinuation of its daily fantasy sports service in certain European markets. The company’s fourth-quarter financial results for 2022 are due to be reported on February 17th, 2023. It is estimated that the company will report annual losses in the range of $780 million to $800 million for the year 2022.
Without DraftKings layoffs, the company was expecting to incur losses of up to $575 million in the full-year 2023, following previous losses of over $3 billion between 2019 and 2021.
DraftKings plans to heavily market its sportsbook in Massachusetts, its home state when mobile sports betting launches there in March. The cost of acquiring players through marketing, free bets, and other promotional efforts surrounding state launches is a significant contributor to the company’s revenue losses.
With no additional state launches beyond Massachusetts planned for 2023, DraftKings aims to reach profitability in the fourth quarter of the year. At the time of writing, DraftKings Inc. (DKNG) is trading at $16.48 (9.94%).
DraftKings is a widely-used online sportsbook accessible to players from Canada and selected states in the US with legalized sports betting. Founded in 2012, it has become one of the largest operators in the industry with over eight million registered users.