MPL Slashes Workforce by Half Due to Impact of New Tax Rules
- ByStartupStory | August 9, 2023
Mobile Premier League (MPL), a prominent real money gaming platform, has recently laid off approximately 350 employees, which accounts for about 50% of its workforce. The decision to downsize was influenced by factors including the new Goods and Services Tax (GST) regime for gaming companies. MPL’s Co-founder, Sai Srinivas, attributed the layoffs to the significant impact of the 28% tax imposed by the new regime, which would substantially increase MPL’s tax burden by 350%-400%. An internal email from Srinivas to the employees confirmed these developments, stating that the organization needed to reduce variable costs associated with personnel, servers, and office infrastructure to ensure its viability.
“As a digital company, our variable costs predominantly involve people, servers, 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.
The aftermath of the new GST policy was marked by concerns and discussions. The government announced a potential reconsideration of the 28% tax rate on online gaming and casinos six months after its implementation on October 1. Finance Minister Nirmala Sitharaman noted that this tax could enhance revenues, particularly in establishments like casinos, race courses, and online gaming platforms. However, numerous gaming companies and industry associations, including the All India Gaming Federation, expressed apprehensions about the immediate impact of this decision, fearing job losses and reluctance among startups to continue operations. Observers in the industry suggested that the shift to a higher tax bracket for online gaming might prompt gamers to seek platforms outside India to evade excessive tax liabilities.
In summary, the real money gaming platform MPL has made substantial layoffs due to the effects of the new GST regime on gaming companies, with the 28% tax rate significantly affecting its operations and leading to workforce reductions.
Follow Startup Story
Related Posts
