Gaming platform MPL to lay off 350 employees to ‘survive’ after 28% GST

NEW DELHI/BENGALURU: Indian gaming app Mobile Premier League will lay off 350 employees as it takes steps to “survive” a tax imposed by the Indian government on online gaming companies, according to an internal memo seen by Reuters on Tuesday.

The move comes on the back of the government’s decision last month to impose a 28% goods and services tax(GST) on funds that online gaming companies collect from customers.
The new rule will increase the company’s tax burden by 350%-400%, MPL CEO Sai Srinivas said in the memo, adding that the company is revisiting expenses related to their server and office infrastructure.

“Adjusting to a sudden increase of this magnitude means we need to make some very tough decisions … We must take steps to bring these expenses down in order to survive and to ensure that the business remains viable,” Srinivas said.
MPL did not immediately respond to Reuters’ request for comment.
Half the workforce employed by the company could be laid off, with the product team to be the most affected with more than 60 job cuts, a source familiar with the information told Reuters. The source could not be named as they are not authorised to speak to the media.
It is not clear how many employees the company currently has.
More than 100 gaming firms said in a letter to India’s finance ministry that the tax will stifle foreign investment and put $2.5 billion already invested in the sector at risk.