Massive Workforce Reduction Hits Gaming Giant
In a dramatic organizational restructuring, domestic real-money gaming company Gameskraft has terminated more than 400 employees, representing over 80% of its total workforce. The Bengaluru-based firm confirmed the massive layoffs are a direct response to fundamental changes in India's online gaming landscape triggered by new government legislation.
The company's workforce has been drastically reduced from approximately 600 employees to fewer than 100 following this latest round of job cuts. This marks the second significant workforce reduction for Gameskraft, which had already laid off around 120 employees in September as it began adapting to what it termed "external realities."
Severance Package and Employee Support
Gameskraft has structured a comprehensive severance package for affected employees. According to company statements, terminated staff will receive compensation equal to one month's salary for each completed year of service, with this benefit capped at three months. The package also includes notice pay as per employment contracts, a one-time ex gratia payment, and up to 45 days of leave encashment based on total salary.
Group health insurance coverage will continue until March 2026 or until the employee secures new employment, whichever comes first. Additionally, term life insurance under the group plan provides coverage of up to twice the employee's CTC or Rs 5 crore and remains valid until June 30, 2026.
The company has waived all recoveries for joining bonuses, relocation expenses, and notice-period buyouts. Gameskraft is also providing job placement assistance, referrals, recommendation letters, and has committed to giving affected employees priority consideration for future roles when conditions improve.
Regulatory Impact on Gaming Industry
The primary driver behind these drastic measures is the implementation of the Promotion and Regulation of Online Gaming Act, 2025. This new legislation fundamentally bans money-based games where users deposit funds with the expectation of winning returns, effectively dismantling the core business model of real-money gaming companies.
In an official statement to Moneycontrol, Gameskraft explained: "The decision was driven by business continuity considerations, following the implementation of the Promotion and Regulation of Online Gaming Act, 2025, which triggered a fundamental shift in the operating environment for real money gaming companies."
Gameskraft isn't alone in facing these challenges. Other major players affected by the new regulation include Head Digital Works (A23), Mobile Premier League (MPL), Baazi Games (Moonshine Technology) backed by Nazara Technologies, and Games24x7. Several of these companies have joined Head Digital Works in challenging the constitutional validity of the new law, with the Supreme Court currently hearing the case. The next court session is scheduled for November 26.
Ongoing Corporate Challenges
The layoffs come amid other significant challenges for Gameskraft. In September, the company filed a complaint against its former Chief Financial Officer Ramesh Prabhu, alleging that he had siphoned off nearly Rs 270.43 crore over almost five years. Following the complaint, an FIR was registered against Prabhu at the Marathahalli police station in Bengaluru.
This combination of regulatory pressure and internal financial issues has created a perfect storm for the once-thriving gaming company, forcing it to take extreme measures to ensure business continuity in an increasingly hostile operating environment.
The massive workforce reduction signals a broader industry transformation as real-money gaming companies struggle to adapt to India's evolving regulatory framework, with many either pivoting their business models or facing potential collapse.
