Online Gaming Stakeholders Warn Potential Layoffs Due To 28% GST

New Delhi, Aug 5 (KNN) The stakeholders of the online gaming industry said there is a probability of layoffs and hiring pullbacks owing to the imposition of the 28% goods and services tax (GST), reported ET. 

The GST Council’s decision will come into effect from October 1. 

It will not only impact fresh hiring but also lead to job losses, particularly at companies in the early stage of growth, many of which may shut down due to unviable business models as well as the inability to attract investments, they told ET.

“We are likely to see a severe impact on a majority of players, particularly within the MSME segment,” a spokesperson for All India Gaming Federation (AIGF) told ET. 

“With the winding up of many MSMEs and startups in the sector, the impact on employment will be severe. This will mean job freezes and layoffs within the surviving players, as revenues and valuations will fall significantly.”

The online gaming industry claims to currently employ over 100,000 people, with various earlier estimates projecting 1.6-4 lakh additional direct and indirect jobs to be created in two-three years across areas such as tech, programming, testing, animation, design, and artistry among others.

That momentum will now be impacted significantly, industry folks said.

“It’s not just the tax; it’s the sentiment. Now capital will stay away,” a founder of an online gaming company told ET seeking anonymity.  (KNN Bureau)