Online gaming platform Rush Gaming Universe from Hike is laying off 55 employees amidst the recent changes in the GST policy by the government. The layoff includes 24 non-full time employees and amounts to around 22% of the company’s total workforce.

The company offers a variety of games on their platform such as Ludo, Carrom, Snakes & Ladders, Pool Royale, Fruit Fight, Call Break and others. The online gaming platform claims that it sees around 5.2 million monthly users, and in June this year it claims to have reached the Rs 2500 crore milestone in terms of annualized gross revenue in just two years of operations.

“Business is in best shape ever. This 400% increase in GST is a bazooka pointed at us. We’ll need to absorb some of it,” said Kavin Bharti Mittal, founder and CEO of Hike, as quoted by Moneycontrol.

This, however, is not the first instance of layoffs by a company due to the 28% GST levy on the sector. Yesterday, news of another skill-gaming platform MPL laying off half of its workforce surfaced. The company confirmed that the decision was taken due to the increased tax burden.

The GST Council, during its 50th and 51st meetings recently, announced that the GST will be levied on full face value for online gaming, casinos and horse racing and the valuation will be done on the initial deposits made by the players.

This change in tax levy, however, is only applicable to the real money gaming sector. The industry stakeholders and experts have cited that the new rate will increase the tax burden on all companies by 350%-400%.

As a result, to absorb the impact the companies are compelled to lay off. The new tax regime is expected to disrupt the growth momentum of the industry. Many of the small startups might even shut down, stakeholders predict.

For example, even before the GST Council’s meeting on August 2, founders of online real-money gaming company Quizy decided to close down their venture and took to Linkedin to announce the news.