Gameskraft Layoffs 400-Plus Amid GST and Regulatory Storm

Gameskraft Technologies, one of India’s most prominent real-money gaming (RMG) companies, has undertaken a sweeping organizational restructuring that has resulted in the layoff of over 400 employees, or more than half of its approximately 600-strong workforce.

The move marks one of the most severe downsizing exercises in India’s gaming sector, triggered primarily by a dual crisis: a crippling regulatory crackdown and internal financial misconduct.

The Bengaluru-based firm confirmed the job cuts, stating that the decision was necessary for “business continuity” following the implementation of the Promotion and Regulation of Online Gaming Act, 2025 (PROGA).

This law has fundamentally altered the operating environment by effectively banning all cash-based online games, including those traditionally classified as skill-based, if they involve monetary stakes.

Regulatory Headwinds Sink Core Business at Gameskraft

The regulatory disruption, which took effect in August 2025, forced Gameskraft to suspend its core real-money gaming operations on platforms like RummyCulture, Playship, RummyPrime, and LudoCulture.

The company, which had been one of India’s fastest-growing gaming startups, stated that the policy shift made several of its core verticals unviable, compelling a review of projects, expenses, and team structures.

Gameskraft’s current retrenchment significantly expands on an initial round of approximately 120 layoffs announced in September.

This demonstrates the far-reaching and profound impact of the new legislation.

The law defines an “online money game” as any digital game where users deposit money expecting financial returns.

This definition effectively outlaws the company’s primary revenue streams.

The industry-wide disruption is currently under legal challenge.

The Supreme Court of India is scheduled to hear petitions contesting the law’s constitutionality on November 26.

Until clarity emerges, companies across the sector have been forced into massive layoffs and pivots. These companies include Games24x7, MPL, and Head Digital Works.

Financial Double Whammy: Tax and Fraud

The regulatory ban is compounded by other severe financial pressures that have strained the company’s liquidity and profitability:

1. Increased Tax Liability: The company’s financial performance in FY2024-25 was hit hard by the full-year impact of the 28% Goods and Services Tax (GST). This tax was imposed on the full face value of player deposits. This led to a surge in tax outflows, increasing from ₹1,512 crore to ₹2,526 crore in FY25. This increase was a major factor in the 25% decline in net profit to ₹706 crore, despite a rise in revenue to ₹4,009 crore.
2. Internal Fraud Scandal: Gameskraft is simultaneously grappling with an internal crisis involving its former Chief Financial Officer (CFO), Ramesh Prabhu. He is accused of siphoning off over ₹270 crore of company funds into unauthorized futures and options trading over nearly five years. An FIR has been filed against him. The company recorded a one-time accounting adjustment of ₹270.43 crore linked to this alleged misconduct. This adjustment further impacted its profitability for the fiscal year.

Empathy-Led Exit and Support Package

Despite the extensive job cuts, Gameskraft emphasized that the transition was handled in an “empathy-led” manner. The support package for affected employees is comprehensive:

• Severance Pay: The severance package includes one month’s salary for each completed year of service, capped at three months. This is paid out alongside notice pay and a one-time ex-gratia amount.
• Benefits Extension: Group health insurance will remain active until March 2026 (or until the employee joins a new company). Separately, term life insurance coverage is extended until June 2026.
• Waivers and Assistance: The company waived all recoveries related to joining bonuses and relocation costs. It is also offering job placement assistance, referrals, recommendation letters, and a priority rehire option for future openings.

The founder, Prithvi Singh, noted in an internal communication that the decision was driven by the “external environment and the need to adapt to a new reality.” 

He emphasized the layoffs were not driven by employee performance.

With its staff count now reportedly below 100, Gameskraft is focused on stabilizing its operations and redefining its strategy.

This is taking place in an environment where its core business model has been effectively dismantled.

Note: We are also on WhatsApp, LinkedIn, and YouTube to get the latest news updates. Subscribe to our Channels. WhatsApp– Click Here, YouTube – Click Here, and LinkedIn– Click Here.