Kavin Bharti Mittal, the founder of Hike, has made the difficult decision to lay off approximately 55 employees, which amounts to more than one-fifth of the company’s workforce. This action was taken in response to the significant impact of the recent GST hike on online gaming.
Interestingly, this news comes just a week after Mobile Premier League (MPL), a prominent gaming unicorn, also had to make cuts by letting go of approximately 350 members of their India team. This reduction in staff was a necessary step to alleviate the financial strain caused by the increase in GST to 28 percent.
Kavin Bharti Mittal, the CEO of Hike, explained that out of the 55 affected individuals, 24 are non-full-time employees, making up around 22 percent of the total workforce. Although the business is thriving, the sudden 400 percent surge in GST rates has had a crippling effect. As a result, Hike/Rush has been compelled to absorb some of the impact, which unfortunately led to the reduced workforce.
It’s worth noting that Hike’s entire team is currently focused on developing their Web3 gaming platform, known as Rush Gaming Universe. With notable investors such as Tencent, Foxconn, Bharti Group, Tribe Capital, Polygon, Flipkart co-founder Binny Bansal, serial entrepreneur Bhavin Turakhia, and Cred Founder Kunal Shah, Hike’s future prospects remain promising.
The gaming platform proudly boasts a monthly active user base of 5.2 million and has distributed a staggering $308 million (approximately Rs. 2,545 crore) to winners on an annual basis. However, it’s important to acknowledge that even smaller gaming start-ups, like Quizy, have been forced to shut down as a result of these challenging circumstances.
The All India Gaming Federation (AIGF), an industry body, expressed deep concern regarding the drastic 400 percent increase in GST liability. They highlighted that many entrepreneurs who have pioneered innovations in the gaming sector, particularly those running MSMEs and startups, will be severely impacted, potentially leading to business closures.
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Eugen Boglaru is an AI aficionado covering the fascinating and rapidly advancing field of Artificial Intelligence. From machine learning breakthroughs to ethical considerations, Eugen provides readers with a deep dive into the world of AI, demystifying complex concepts and exploring the transformative impact of intelligent technologies.
