Online Gaming GST Fallout: MPL Lays Off 350 Employees To Tackle Financial Challenges, Internal Memo Shows

MPL hasn't clarified which departments will face the brunt of the layoffs.

MPL has yet to release an official declaration regarding the impending layoffs.

Source : Getty

Mobile Premier League (MPL), the Bengaluru-based prominent gaming app, is bracing itself for a substantial downsizing, affecting 350 of its employees, as part of a strategic response to navigate the financial challenges posed by a recent tax regulation initiated by the Centre. This development was unveiled through an internal memo accessed by ABP Live on Tuesday.

This tactical manoeuvre follows the government's recent announcement to levy a hefty 28 per cent tax on the proceeds accrued by online gaming enterprises from their customer base. In the memo, MPL CEO Sai Srinivas highlighted that this imposition would lead to an astronomical escalation of the company's tax commitments, potentially escalating the burden by an alarming range of 350 to 400 per cent. In light of this daunting situation, Srinivas underscored the company's intention to meticulously reassess its expenditure pertaining to both server infrastructure and office facilities.

The CEO's communication conveyed the gravity of the circumstances, stating, "In the face of an abrupt and seismic surge in financial obligations, we find ourselves compelled to make some exceptionally challenging choices. It has become imperative for us to curtail these expenditures in order to ensure our survival and safeguard the continued viability of our operations."

As of now, MPL has yet to release an official declaration regarding the impending layoffs, keeping the broader public in suspense about the company's concrete plans.

As per Reuters, sources with an insider perspective have indicated that nearly half of the existing workforce might bear the brunt of these layoffs, with the product team expected to bear the heaviest toll, experiencing a reduction of over 60 positions. 

Presently, the exact magnitude of MPL's personnel is not definitively known.

Beyond MPL, a coalition of over 100 gaming companies has collectively communicated to the Indian finance ministry their apprehensions regarding the potential ramifications of this tax policy. Their assertion emphasises that such taxation could stymie foreign investment within the sector and even endanger the $2.5 billion worth of investments that have been infused into this realm.

In the midst of this uncertainty and concern within the online gaming sector, the Centre's regulatory move reverberates across the industry, triggering strategic recalibrations and apprehensions about the broader investment landscape.