The Bengaluru-based startup reportedly announced its plans to cut jobs to employees last week and sent a formal communication today (August 8). Reports suggest that about 350 people may lose their jobs. The product team is likely to be the most affected with more than 60 job cuts, as per a report in news agency Reuters. It is not clear how many employees the company currently has.
MPL CEO’s memo to employees
“As a digital company, our variable costs predominantly involve people, server and office infrastructure. Therefore, we must take steps to bring these expenses down in order to survive and to ensure that the business remains viable,” Sai Srinivas, founder and chief executive of MPL, is said to have told employees in the memo.
The new rule will increase the company’s tax burden by 350%-400%, MPL CEO Sai Srinivas said in the memo. “Adjusting to a sudden increase of this magnitude means we need to make some very tough decisions … We must take steps to bring these expenses down in order to survive and to ensure that the business remains viable,” Srinivas added in the memo.
Last week, the GST Council did introduce a measure to partially alleviate the industry’s concerns. The finance minister said that the 28% taxation will be on the total deposits made for playing online games rather than taxing every individual bet. Additionally, the council has planned to reevaluate this decision within the next six months. The GST will be imposed starting October 1.