Online gaming unicorn company Mobile Premier League (MPL) is laying off 350 employees — nearly 50 per cent of its workforce. This comes at a time when the government has levied the 28 per cent Good and Services Tax (GST) on full deposit value for real-money online gaming firms.
In an email to its employees, MPL co-founders Sai Srinivas and Subh Malhotra said that the new rules will increase the tax burden and thus it had to take “some very tough decisions”.
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“The new rules will increase our tax burden by as much as 350-400 per cent. As a business, one can prepare for a 50 per cent or even a 100 per cent increase, but adjusting to a sudden increase of this magnitude means we need to make some very tough decisions,” MPL co-founders said in an email to employees, a copy of which was viewed by businessline.
They further said their variable costs predominantly involve people, server and office infrastructure. The company said they have already initiated work on revisiting their server and office infrastructure costs.
“Despite this, we will still have to reduce our people related costs. Regrettably, we have to let go of around 350 of you,” the mail stated.
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It further added that the company was doing well after it turned EBITDA positive in December. It added that it recorded its best ever month in terms of business performance in June and it beat that in July.
In September last year, MPL raised $150 million and was last valued at $2.3 billion, which also marked its entry into the unicorn club.
It counts Peak XV, SIG, RTP Global, Moore Strategic Ventures, Play Ventures, Base Partners, Telstra Ventures, and Founders Circle Capital among its investors.