Mobile Premier League, often referred to as India's largest mobile gaming platform, has announced in an internal email that it is laying off 350 employees. MPL's decision to slash roughly fifty per cent of its workforce (as per the company’s LinkedIn profile, it has around 900 employees) comes after the GST Council's recommendation to impose a 28 per cent tax on full deposit value in online gaming (gaming platforms currently pay an 18 per cent GST on platform fees).
In an internal mail to employees, MPL cofounder and CEO Sai Srinivas broke down how the imposition of 28% GST on full face value for real-money gaming, increased the tax burden on the company by 350-400%
“As a digital company, our variable costs predominantly involve people, server and office infrastructure… We have already initiated work on revisiting our server and office infrastructure costs. However, despite this, we will still have to reduce our people-related costs. Regrettably, we will have to let go of around 350 of you,” said Srinivas.
"It's As If We Find Ourselves Needing To Repeat A School Year", MPL Bosses
This is reportedly the second round of layoffs for the Bengaluru-based startup, backed by Peak XV Partners, in about a year. It had let go more than 100 people across verticals in 2022, while also exiting Indonesia and shutting down its streaming service. "Personally, this is the toughest decision we have ever had to make. It's as if we aced our class and now find ourselves needing to repeat a school year," the co-founders said in the email.
"We have spent a lot of time evaluating and re-evaluating this decision; asking ourselves if we should wait or not. Eventually, we came to this conclusion because we believe that in uncertain times the sooner we are able to deliver certainty to everyone, the better" they added.
Started in 2018 by Srinivas and Malhotra, MPL offers daily fantasy sports, puzzles, quizzes, board games and casual games on its Android and iOS apps. MPL was last valued at $2.3 billion after it raised a reported $150 million in September 2022.
A few weeks ago, in a letter to the Prime Minister, a group of global and domestic investors backing online gaming platforms, including MPL backers Peak XV Partners (formerly Sequoia Capital India) requested the PM to review the 28% gaming tax. The letter mentioned that the levy would adversely impact $4 billion in prospective investments and could 'prompt many companies to move offshore to avoid an onerous tax burden which would send a wrong signal to the larger investor community and on the ease of doing business in India.',