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To streamline its operations, US online sports betting operator DraftKings is eliminating about 3.5% of its workforce.
On Wednesday, DraftKings announced it would be laying off 140 jobs as part of a reorganization. In a statement reported on CNBC, a DraftKings spokesperson said:
“We are constantly evaluating our teams to ensure they are best positioned to meet our company goals in 2023 and beyond. We have decided to reorganize some teams, which is resulting in the elimination of approximately 140 roles.”
DraftKings layoffs are a move toward profitability
The company said its segments in Europe, the Middle East, and Africa will be the most affected. However, some jobs will also be terminated in the US. According to a statement, the affected segments include engineering and talent acquisition.
Part of the DraftKings reorganization plans stems from its transition from business-to-business into mobile development.
The DraftKings layoffs are surprising for a leading US online sports betting firm. Especially considering the industry is entering its peak months. Major League Baseball is right around the corner. While other sports like basketball and hockey are entering the second half of their season.
Let’s not forget Super Bowl betting is less than two weeks away. The fact that DraftKings is cutting its workforce now shows it’s comfortable heading into the peak months with fewer workers.
DraftKings layoffs also come ahead of the company’s fourth-quarter earnings report on Feb. 16.
In a note to clients, Piper Sandler analyst Matt Farrell said that as investors continue to demand profitability, the layoffs could be a positive.
Not the only company cutting its workforce
DraftKings isn’t the only online betting company cutting jobs. Last month, Bally’s Corp said it was cutting 15% of its staff in a move towards profitability.
According to the company’s 8-K filing: “Decisions regarding the elimination of positions are subject to local law and consultation requirements in certain countries, as well as the company’s business needs.
The company estimates that it will incur between approximately $10 million to $15 million in cash severance costs in connection with the Plan, which the company expects to incur in the first quarter of 2023.”
