DraftKings announced earlier this month that it was going to make 140 jobs redundant, equating to 3.5 per cent of its global workforce. The news came as redundancies across tech-based industries are rapidly mounting.
Unlike many of the tech redundancies witnessed in other markets over the last few months (crypto being a notable one), the operator said the reduction in headcount was not a response to poor performance, but merely a reorganization.
“With an increased focus on operational efficiencies, we are constantly evaluating our teams to ensure that they are best positioned to meet our company goals in 2023 and beyond,” a DraftKings statement said the time.
DraftKings’ stock reportedly rose by around 10 per cent the week the announcement was made and is up more than 44 per cent this year, but clearly there is a growing caution in the tech labour markets and a trend towards more slim-lined teams.
However, DraftKings is not the only igaming firm to announce staff cuts. In January, Bally’s Corporation confirmed it would cut 15 per cent of its U.S. Interactive division workforce. Meanwhile, in Europe, Genesis Gaming, Hero Gaming and betting exchange Smarkets are all among the firms to have recently culled jobs.
Pan out to the wider technology industry and it’s clear to see that after a hiring boom throughout the pandemic, firms have been forced to rationalise as markets return to something more closely resembling pre-pandemic conditions.
Among the high-profile names to hack away at their workforces are Microsoft and Amazon, who made huge cuts at 10,000 and 18,000, respectively. Meanwhile, Meta laid off 11,000 people and Twitter cut 7,500 after Elon Musk’s controversial acquisition of the social media platform.
A catastrophic dip in the value of crypto in the second half of last year has seen redundancies pile up across that industry, not to mention a number of high-profile exchanges and lenders going out of business entirely.
According to Layoffs.fyi, 1,045 tech companies made 160,097 layoffs last year, with a further 103,767 from 345 companies racked up so far in 2023. I think we can safely say, it’s a trend.
It’s not all doom and gloom for igaming, though. While rationalisation of workforces is inevitable in booming industries, particularly in those with the level of consolidation seen in igaming over the last few years, recruiters operating in igaming and gambling say there are still plenty of opportunities for strong candidates.
Pentasia managing director Alastair Cleland told CDC Gaming Reports: “Our take is that the DraftKings layoffs are a natural part of that business’ lifecycle – i.e. trimming the roles that were an overstretch – rather than anything more worrying. In the U.S. labour market, it’s easier to make staffing reductions, giving more flexibility for employers.
“Elsewhere there are often greater protections for staff that limits the potential for layoffs. In general, the talent market remains buoyant; hiring rates globally remain high, particularly in tech and product. There’s still ample optimism, as reflected by strong hiring demand. Generally, it’s sales, commercial and marketing roles that are first to go when the market turns, and this certainly isn’t something we’re seeing.”
Likewise, Betting Connections head of igaming Sennette Lam reflected positively on the European igaming market, where she said most of the changes to headcount had been the result of strategic restructuring or mergers and acquisitions.
“In my opinion any good candidates are not out of work for too long with there being a huge need always for experienced professionals in this very saturated field”, she said.
“With the way the job market is at the moment, if based in a gaming hub such as Malta, London, or Gibraltar, being made redundant is not as devastating as it used to be as there are plenty of other opportunities on their doorstep.”
True as this may be, we can expect to see more redundancies arise over the coming month as the U.S. igaming market naturally consolidates after almost five years of rapid investment and growth.