Gameskraft layoffs cross 400 as Online Money Gaming ban forces deep restructuring

Online gaming firm Gameskraft Technologies has laid off over 400 employees, accounting for more than half of its 600-strong workforce, as part of a sweeping organisational restructuring triggered by regulatory challenges and internal turmoil following an alleged multi-crore fraud by its former chief financial officer.

The company confirmed that the layoffs — initially pegged at 120 employees when the process began earlier this year — have now expanded significantly, marking one of the most severe downsizing exercises in India’s real money gaming sector.

"As part of the organisational restructuring undertaken approximately 400+ employees across teams and functions were impacted after careful deliberation," Gameskraft said in a statement when asked about the development by Storyboard18. "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."

The Bengaluru-based firm, once one of India’s fastest-growing online gaming startups, cited the government’s regulatory crackdown on real money gaming as the primary reason for the workforce reduction. The new law, which bans or heavily restricts cash-based games under the pretext of curbing addiction and financial risk, has upended the business models of several leading firms.

Gameskraft — which operates popular platforms offering skill-based games — said the policy shift made several of its core verticals unviable, forcing a review of ongoing projects, expenses, and team structures.

Despite the large-scale layoffs, Gameskraft has emphasised that it implemented comprehensive employee support measures, describing the transition as “empathy-led.”

All employees, including probationers, interns, and contractual staff, received three months’ salary in advance, while all pending job offers were honoured. Impacted employees were given financial packages that included a one-time ex-gratia payout, severance pay equivalent to one month’s salary per completed year of service (up to three months), notice pay, and leave encashment for up to 45 days.

The company has also extended group medical insurance until March 2026 and term life coverage up to twice the employee’s CTC or ₹5 crore until June 2026. Access to mental health and wellness programmes remains available until May 2026, and women employees on maternity leave have been granted six additional months of paid leave.

In addition, Gameskraft is offering career transition assistance, job placement support, reference letters, and a priority rehire option for future openings. The company has waived all recoveries related to joining bonuses, relocation costs, and notice period buyouts.

The CFO scandal

Gameskraft lodged a police complaint against Prabhu in September, leading to an FIR registered by Marathahalli Police under multiple provisions of the Bharatiya Nyaya Sanhita (BNS), including theft, criminal breach of trust, forgery, and falsification of accounts.

Prabhu, 47, a chartered accountant who joined the company in 2018, allegedly diverted around ₹231 crore from company accounts into his personal bank account between FY20 and FY25. He purportedly fabricated investment documents and manipulated accounting records to disguise the diversions as legitimate corporate transactions.

An internal audit later confirmed a loss exceeding ₹250 crore, after his speculative futures and options (F&O) trades failed. Prabhu reportedly confessed to the misconduct in an email to the management before disappearing from the company’s Bengaluru office in March 2025. He remains untraceable.

Gameskraft’s FY25 filings show that the company reported a 12% increase in revenue to ₹3,896 crore, up from ₹3,475 crore in FY24. However, net profit fell by 25% to ₹706 crore due to an exceptional loss of ₹270.43 crore linked to Prabhu’s actions and increased tax liabilities under the new GST regime.