IGT layoffs latest sign of a difficult market for gaming industry

The newly reformed IGT announced layoffs Monday affecting approximately 700 employees, or about 10% of its global workforce, becoming the latest gaming company to make cuts in the face of macroeconomic headwinds. The breakdown of roles and locations was not disclosed.

According to an internal memo reported by the Las Vegas Review-Journal, IGT CEO Hector Fernandez told staff the layoffs weren’t related to performance. Instead, they were “part of that effort to simplify our structure, reduce duplication, and enable us to move with greater clarity and speed.”

“What matters now is how we move forward together: supporting one another, focusing on our priorities and continuing the work that will define the next chapter of our company,” Fernandez continued. “We came together to build a company that can lead in a rapidly evolving industry, and I remain confident in that opportunity and in the strength of our team.”

IGT recently completed its $6.3 billion merger with Everi Holdings, and the combined entity is now private under Apollo Global Management. The two suppliers had previously agreed to an independent merger before Apollo came over the top to acquire both. As part of the deal, IGT’s gaming business was merged with Everi’s financial technology segment — IGT’s former lottery division was spun off into a separate public company, Brightstar Lottery.

The layoffs were not stunning, in the sense that the complex merger was bound to result in further changes than just the lottery divestment. But they are the latest indication that gaming companies are feeling the squeeze as the first quarter of 2026 comes to a close.

Uncertain market industry-wide

Since US President Donald Trump took office for his second term last January, the US economy has seen dramatic swings due to increased tariffs, government shutdowns, sticky inflation and most recently, the widening war with Iran.

For a consumer discretionary industry like gaming, these impacts touch nearly every segment. Tariffs raise construction costs for operators and production costs for suppliers; government shutdowns and geopolitics impact consumer travel and spending for operators; and sticky inflation keeps interest rates high, suppressing M&A and debt refinancing for the entire industry.

Gaming companies currently have lower enterprise multiples and higher debt-to-EBTIDA ratios than the market average, per data from New York University. For suppliers like IGT, it becomes increasingly difficult to forecast or perform well when the cost of materials and trade is uncertain from one moment to another. One reaction to the uncertainty is to reduce staff, but this too is at risk of being short-sighted.

“The hard part is that we’re not thinking six months, nine months, 12 months down the road. The long-term effect [of tariffs and economic uncertainty] is unclear,” Daron Dorsey, CEO of the Association of Gaming Equipment Manufacturers, told iGB last October.

“No one necessarily knows when things will become more stable and consistent. So no one is making long-term strategic decisions, because things might change again four months from now. Then that might undo something that you do today. And that’s the world they’re living in right now.”

Layoffs at multiple companies this year

In addition to IGT, multiple other high-profile industry names have announced layoffs this year. Perhaps the most significant in terms of scope was Underdog, which laid off 20% of its workforce in late February. The fantasy sports upstart is transitioning to prediction markets, which, as national products, require less manpower than state-by-state frameworks.

“It’s simply a different operation, and the changes we made are a part of that transition,” Underdog CEO Jeremy Levine said in a statement.

In a similar vein, DraftKings also announced layoffs in February, though its totals were not disclosed. In a statement, the company said it “decided to reorganize some teams to better align their people with the most important priorities and areas of investment for the company”. Citizens analyst Jordan Bender used an estimate of 5% of DraftKings’ workforce in his research note, which he said could save the company some $30 million.

“We believe the current round of restructuring could have been larger or more impactful for the model if not for the push into prediction markets based on the CEO’s push to implement AI throughout the organization for internal and external functions,” Bender wrote to investors.

In the iGaming world, supplier Bragg Gaming shed 12% of its staff in January. The move was intended to “realign” the company for future growth while resulting in cost savings of approximately €4.5 million.

“Our strategic restructuring is designed to capitalise on our strong foundation. It will position us extremely well for organic growth and concurrent market consolidation opportunities,” Bragg CEO Matevz Mazij said in a statement.

Casino industry solid but challenges remain

The land-based casino industry has so far avoided mass layoffs, but the outlook is still uncertain, especially in Las Vegas. In last year’s fourth quarter, UNLV’s quarterly Southern Nevada Business Confidence Index fell to its lowest level since the Great Recession, driven lower with low hiring sentiment and future expectations.

No major operators have announced large layoffs this year, but southern Nevada has seen job losses as a whole. According to the Nevada Department of Employment, Training and Rehabilitation, the Las Vegas metro area finished 2025 with nearly 10,000 fewer jobs than December 2024. The state’s seasonally adjusted unemployment rate of 5.2% was slightly above the national average of 4.4%.

Multiple Las Vegas casinos did confirm layoffs from mid-2024 to mid-2025. These included the Rio Hotel and Casino, the Venetian and Palazzo, and Resorts World Las Vegas. Additionally, MGM Resorts last April eliminated concierge services at six of its nine Strip casinos last April.

“The fact of the matter is that we’re always managing our labor expenses, and you’re seeing a reflection of that,” MGM CFO Jonathan Halkyard said on the company’s Q1 2025 earnings call.