“MPL to Lay Off 350 Employees Amidst 28% GST Taxation Changes in India’s Gaming Industry”
Esports and skill gaming unicorn Mobile Premier League (MPL) is reportedly taking drastic measures by laying off 350 employees, which accounts for approximately 50% of its workforce in India. This decision follows the recent recommendation from the GST Council to impose a significant 28% tax on the full deposit value for gaming platforms.
Esports and skill gaming unicorn Mobile Premier League (MPL) is reportedly taking drastic measures by laying off 350 employees, which accounts for approximately 50% of its workforce in India. This decision follows the recent recommendation from the GST Council to impose a significant 28% tax on the full deposit value for gaming platforms.
The move has raised concerns within the gaming industry, as the new GST rules could lead to an overwhelming 350-400% increase in MPL’s tax burden. Co-founders Sai Srinivas and Shubh Malhotra conveyed this message to their employees in an email, a copy of which was viewed by Moneycontrol.
The email also explained that MPL’s variable costs are primarily related to people, server, and office infrastructure. The company had already initiated efforts to reevaluate its server and office expenses, but it appears that reducing employee-related costs became inevitable in the face of the tax increase.
MPL’s co-founders expressed the difficulty of the decision, comparing it to repeating a school year after having previously excelled. The company emphasized the importance of providing certainty to its workforce during uncertain times.
This isn’t the first time MPL has faced significant changes. In 2022, the Bengaluru-based startup laid off over 100 employees and exited the Indonesian market. Despite these challenges, MPL has continued to expand its offerings, currently boasting over 60 games available across various categories.
MPL’s situation underscores the concerns raised by around 130 real-money gaming startup founders, CEOs, and industry associations who signed an open letter last month, urging the government to reconsider the 28% tax proposal. MPL was among the signatories, along with its investors Peak XV and RTP Global.
While MPL’s immediate future remains uncertain, its situation has ignited a broader discussion within the gaming industry about the impact of taxation on innovation and growth. As the sector navigates these challenges, the ultimate effects on gaming startups, players, and the industry as a whole are yet to be fully realized.
Sources By Agencies
About The Author
