MPL Responds to New Tax Norms by Laying Off 350 Employees

Mobile Premier League (MPL), a leading figure in esports and skill gaming, has announced the difficult decision to let go of 350 of its employees. This move affects nearly half of its Indian workforce, according to inside sources. The reason? A sudden, hefty GST increase of 28% on full deposit value for the gaming industry.

Previously, gaming platforms had been taxed 18% GST solely on platform fees. Now, there’s no distinction in the taxation between games of skill and chance. The resulting impact on MPL’s finances is immense. In a direct communication with their team, MPL co-founders Sai Srinivas and Shubh Malhotra expressed, “The new rules will increase our tax burden by as much as 350 percent-400 percent. Adjusting to such a dramatic rise means we’re faced with making some incredibly challenging choices.”

MPL’s major costs are largely tied to its workforce, server, and office infrastructure. They’ve already taken steps to re-evaluate and adjust their infrastructure overheads. But the email stated plainly that people-related expenses would have to be cut down too.

In a heartfelt note, the co-founders shared, “It feels like we’ve excelled in our academic year only to be held back. We’ve pondered long and hard over this decision, wondering if we should wait. However, in unpredictable times, it’s crucial to provide clarity and stability as soon as possible.”

This isn’t the first time MPL has had to take such an action. Last year, the Bengaluru-based firm laid off over 100 employees and withdrew from the Indonesian market.

MPL, founded in 2018 by Sai Srinivas and Shubh Malhotra, boasts a plethora of gaming options on its platforms. With over 90 million registered users spanning Asia, Europe, and North America, its rise has been meteoric. After securing a $150 million investment last September, the firm’s valuation rocketed to $2.3 billion.

Investors in MPL include notable names like Peak XV, SIG, RTP Global, Go-Ventures, Moore Strategic Ventures, Play Ventures, Base Partners, Telstra Ventures, and Founders Circle Capital.

A collective of 130 gaming startup founders and CEOs, including MPL, penned an open letter last month, appealing to the government to rethink the proposed GST increase. MPL’s co-founders noted that, despite these setbacks, their business performance has been admirable. They relayed, “In fact, we recorded our best ever month in terms of business performance in June and surpassed it in July.”

For those affected by this transition, the founders ensured ample support, stating, “While no gesture might suffice, we pledge to offer the utmost assistance during this period and will strive to help you discover new opportunities.”