Online gaming firm Gameskraft Technologies has laid off more than 400 employees — over half its 600-member workforce — in one of the largest downsizing moves in India’s real money gaming sector. The decision follows a combination of regulatory pressure and internal financial turmoil linked to an alleged multi-crore fraud involving the company’s former chief financial officer.
The Bengaluru-based startup, once among India’s fastest-growing online gaming firms, said the layoffs were part of a comprehensive restructuring aimed at ensuring business continuity after the government’s Promotion and Regulation of Online Gaming Act, 2025 came into effect. The new law has drastically altered the operating environment for companies offering cash-based games, leading to the closure or merger of several verticals that had become financially unviable.
Initially, Gameskraft had planned to let go of around 120 employees earlier this year, but the scope of the cuts widened significantly as revenue and liquidity pressures mounted. The restructuring has impacted multiple teams and functions, affecting both full-time and contractual staff.
Despite the large-scale layoffs, the company stated that it had taken an “empathy-led” approach to the transition. Employees were reportedly provided with financial packages, including severance pay, ex-gratia compensation, and extended medical and life insurance benefits. The company has also committed to supporting affected employees with job- placement assistance, reference letters, and rehire priority in future openings.
The layoffs coincide with Gameskraft’s ongoing investigation into a financial fraud allegedly perpetrated by Prabhu, former CFO , who is accused of diverting more than Rs 230 crore into personal accounts between FY20 and FY25. The alleged misconduct was uncovered through an internal audit, which confirmed losses exceeding Rs 250 crore after failed speculative trading activities.
The dual blow of regulatory disruption and internal fraud has left Gameskraft facing one of its toughest periods yet, forcing the company to focus on stabilising operations, rebuilding trust, and redefining its strategy in India’s tightening online gaming landscape.
