DraftKings revealed a decision to reduce 3.5% of its workforce worldwide as part of a serious restructuring in the company’s business.
The job cuts have been announced by the US sports betting operator, along with FedEx and Rivian Automotive, which have aligned with a growing trend among US corporations. DraftKings shared that the move is aimed at boosting the operations’ efficiency and is set to affect approximately 140 jobs in the company.
Most of the positions that have been impacted by the workforce reduction decision are located in Europe, Asia, and the Middle East. The aforementioned 140 lay-offs are set to mostly affect engineering and human resources (HR) jobs because the company has revealed expectations of slower hiring rates in 2023. A spokesperson for the company has explained that the recent reduction of the US sports betting and daily fantasy sports operator was not caused by any economic uncertainties or a slowdown in the company’s business, which makes the situation a lot different than the one faced by many other gambling and betting operators experiencing job cuts.
According to sources familiar with the situation, DraftKings’ lay-off decision affected 15 of its workers in Massachusetts, where the company’s overall workforce amounts to more than 1,300 individuals.
Lay-Offs Unveiled as Part of Ongoing Reorganization of Some DraftKings’ Teams
As revealed by the DraftKings’ spokesperson, the operator is now focused on improving its operational efficiency and makes a regular evaluation of its teams in order to make sure that it remains on track with its goals for 2023 and the years after. This is the reason that stands behind the ongoing reorganization of some teams, which eventually led to the announced elimination of approximately 140 positions.
The news of the job reductions at DraftKings emerged only a few days after in-person sports betting services became officially available in Massachusetts casinos. For the time being, the sports betting and DFS operator is among the few selected operators that have been given preliminary approval from the competent regulatory bodies in the state for offering mobile sports betting services – a move that is being considered a crucial step in the process to start accepting bets in March this year.
In 2021, Jason Robins, the company’s chief executive officer, made a promise to boost the number of employees in Massachusetts in case the local Legislature legalized sports betting in the state. Mr. Robins made the pledge in response to the expanding demand for sports betting services in the state, as well as the increasing popularity of sports betting as a form of entertainment among local residents.
Although the recently announced layoffs represent only a small part of the total workforce of the company, DraftKings faced a significant 10% increase in its stock value, with a price of $16.48 a share on the day of the announcement. For the time being, it seems that the company’s investors also do not seem to mind, so they have given the green light to the company to implement the planned job reductions, which amount to about 3.5% of the overall number of employees of the company.