In one of the most severe cuts to the real-money gaming industry in India, online gaming company Gameskraft Technologies laid off more than 400 employees, or more than half of its workforce. The move follows regulatory disruption triggered by the Promotion and Regulation of Online Gaming Act, 2025, and internal turmoil after an alleged multi-crore fraud by the firm’s former chief financial officer, Storyboard18 reported.
The Bengaluru-based company confirmed the cuts in a statement to Storyboard18, saying the decision came after “careful deliberation” as part of a broad organisational restructuring. “Approximately 400+ employees across teams and functions were impacted after careful deliberation,” a company spokesperson said. “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.”
Initially, around 120 layoffs were expected earlier this year, but the number rose sharply as the company reassessed its operations and cost structure. The industry players’ revenue streams have been severely disrupted by the regulatory crackdown on cash-based gaming, many of which built their business models around real money gaming.
Once among India’s fastest-growing gaming startups, Gameskraft had built a strong portfolio of skill-based gaming platforms. However, the company claimed that a number of its verticals were rendered unviable as a result of the new law, which prohibits or restricts cash-based games due to concerns about addiction and financial risk. This necessitated a rethink of ongoing projects, expenses, and team configurations.
Gameskraft stated that it sought to ensure an “empathy-led” transition despite the scale of the layoffs. All affected employees, including probationers, interns, and contractual staff, received notice pay and leave encashment for up to 45 days in addition to three months’ salary in advance. They also received one month’s pay for each completed year of service (up to three months). Group medical insurance was also extended until March 2026, and term life insurance that covered up to twice an employee’s CTC or 5 crore until June 2026.
Further, Gameskraft said it would continue to offer mental health support until May 2026, while women employees on maternity leave have been given an additional six months of paid leave. Additionally, affected employees will receive assistance with career transition, assistance with placement, and priority rehiring for upcoming openings. All recoveries for joining bonuses, relocation expenses, and notice period buyouts have been waived by the company.
Internal crisis exacerbated by CFO scandal
The layoffs come against the backdrop of a major financial scandal involving the company’s former CFO, Prabhu, who allegedly diverted ₹231 crore from company accounts into his personal bank accounts between FY20 and FY25.
A police complaint filed in September led to an FIR by the Marathahalli Police under provisions of the Bharatiya Nyaya Sanhita, including theft, criminal breach of trust, forgery, and falsification of accounts. An internal audit revealed a total loss exceeding ₹250 crore after Prabhu’s speculative trading losses compounded the fraud.
Prabhu, a chartered accountant who joined Gameskraft in 2018, allegedly manipulated investment documents and accounting records to disguise the diversions. He reportedly confessed in an email before disappearing from the firm’s Bengaluru office in March 2025. He can’t be found at all.
Despite the turbulence, Gameskraft’s FY25 filings show revenue rising 12% year-on-year to ₹3,896 crore, up from ₹3,475 crore in FY24. However, net profit dropped 25% to ₹706 crore, weighed down by an exceptional loss of ₹270 crore tied to the fraud.
The reorganization of Gameskraft exemplifies the mounting pressure that India’s online gaming companies face as they struggle with regulatory uncertainty and funding obstacles. With the government signalling a tougher stance on cash-based gaming, analysts expect more consolidation and layoffs in the sector over the coming months.