Kavin Bharti Mittal, CEO of Hike and owner of Rush Gaming Universe has decided to reduce the company’s workforce in response to the increase in goods and services tax (GST) on online gaming. More than a fifth of the total workforce will be laid off.
This 400% increase in GST liability will be extremely difficult for a large number of enterprising individuals who have introduced innovations in the gaming space. The All India Gaming Federation (AIGF) has the potential to force the closure of many micro, small, and medium-sized enterprises (MSMEs) and startups in the industry.
Despite the company’s strong position, the recent 400% increase in GST poses a significant challenge. The decision will affect approximately 55 employees, including 24 part-time workers.
Hike’s downsizing comes on the heels of a similar move by the gaming platform Mobile Premier League (MPL). MPL recently laid off nearly half of its India-based team, laying off approximately 350 people. This move was made to alleviate the financial strain caused by the GST increase, which raised the tax rate to 28%.