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Real money gaming platform Mobile Premier League (MPL) has laid off about 350 employees or about 50% of its workforce.

As per reports, MPL’s Co-founder Sai Srinivas cited the new GST regime for gaming companies as one of the reasons for this round of layoffs. Srinivas, in an internal email to all employees, said that the 28% tax levied will increase the tax burden on MPL by 350%-400%.

YourStory has seen a copy of the email sent to employees.

“As a digital company, our variable costs predominantly involve people, server, and office infrastructure. Therefore we must take steps to bring these expenses down in order to survive and ensure our business remains viable,” he said.

“We have already initiated work on revisiting our server and office infrastructure costs… However, despite this, we still have to reduce our people-related costs. Regrettably, we have to let go about 350 of you,” Srinivas added.

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Gaming Tax: GST Council to review 28% slab after six months

GST aftereffects

The government said it would reconsider the 28% tax on online gaming and casinos six months after it is implemented on October 1. At the same time, Finance Minister Nirmala Sitharaman on Tuesday said the 28% GST on the full face value of supplies in casinos, race courses, and online gaming will result in higher revenues.

However, several gaming companies and lobbies like the All India Gaming Federation have opined that this decision could create havoc in the sector in the short-term, particularly in the form of job losses, resulting in only a few startups willing to operate.

Players and onlookers in the space warn that the transition to a higher tax slab in online gaming is likely to result in gamers migrating to platforms outside India in a bid to avoid paying taxes altogether.