Zupee lays off around 200 employees amid real-money gaming crackdown

Mobile gaming company Zupee has reduced its workforce by about 200 employees as state-level bans and tighter enforcement against real-money gaming disrupt revenues, forcing startups across India’s gaming sector to rethink business models and cost structures.

Indian mobile gaming firm Zupee has laid off around 200 employees in a significant workforce reduction, reflecting the growing impact of regulatory restrictions on real-money gaming across the country, according to people familiar with the matter.

The job cuts span several departments, including product development, operations, customer support and marketing. Employees were informed over the past week as the company moved to recalibrate its operations amid declining activity in cash-based gaming formats.

Zupee, which built much of its growth around real-money games, has been grappling with slowing user acquisition and revenue pressure following bans imposed by multiple state governments. These measures, coupled with stricter enforcement and legal scrutiny, have created uncertainty for gaming companies reliant on cash-driven models.

Regulatory pressure forces strategic reset

Industry sources said the layoffs are closely linked to recent state-level prohibitions on real-money gaming and heightened compliance requirements in key markets. These actions have significantly disrupted business continuity for platforms dependent on paid gameplay.

In internal communications shared with staff, Zupee’s leadership acknowledged the difficulty of the decision but said it was necessary to ensure long-term sustainability. The company said affected employees would receive severance benefits, career transition assistance and priority hiring referrals through partner organisations.

Zupee also indicated it is stepping up cost-control measures while reassessing its revenue strategy. Executives said the company is exploring alternative formats such as advertising-led engagement, legally compliant skill-based games and tournament-centric offerings to reduce regulatory exposure and stabilise income streams.

Part of a broader industry slowdown

Zupee’s move mirrors a wider slowdown across India’s gaming and digital entertainment sector. Several startups have frozen hiring or trimmed teams as regulatory uncertainty weighs on growth prospects and investor sentiment.

The layoffs come at a time when the broader startup ecosystem is under pressure to demonstrate sustainable unit economics rather than rapid expansion. Venture capital funding has become more selective, with investors urging companies to align operations with evolving legal frameworks.

HR and industry experts say workforce realignments are becoming increasingly common as gaming firms adapt to a tougher regulatory climate. While painful in the short term, such adjustments are often seen as necessary steps toward long-term viability.

Looking ahead, analysts expect further consolidation within India’s gaming sector, with companies capable of pivoting quickly to compliant business models better positioned to retain capital, rebuild confidence and compete in an increasingly regulated environment.