Zupee Lays Off 200 Staff: Exits Real-Money Gaming | Outlook Respawn

In a sweeping restructuring that highlights the volatility in India’s online gaming sector, Delhi-NCR-based Zupee has laid off about 200 employees—roughly 40% of its workforce—and announced a full exit from the Real-Money Gaming (RMG) business. The company said it will support affected staff with severance packages and a ₹1 crore medical assistance fund.

What Happened

Zupee’s latest job cuts are the second significant round in recent months. They come just four months after the startup reduced headcount by around 170 employees—nearly 30% of its workforce at the time—in September 2025. Taken together, the two waves bring total job losses to nearly 370.

According to the company, the latest reductions are part of a broader cost-optimization effort and have primarily impacted technology and customer support teams. Co-founder and CEO Dilsher Singh Malhi described the decision as difficult but necessary to build a more resilient business amid changing market realities.

Why the Pivot Now

Zupee’s move follows the introduction of the Promotion and Regulation of Online Gaming Act, 2025, which bans paid contests. With the core RMG revenue stream rendered non-viable under the new rules, companies across the industry have faced intense pressure to retool their business models. The RMG segment, once estimated at several billion dollars in size, has been significantly disrupted by the regulatory shift.

For Zupee—backed by investors including Z47 Partners, Orios Venture Partners, and Nepean Capital, and having raised around $120 million to date—the immediate priority is to stabilize operations and conserve resources while charting a path forward beyond RMG. The company has not detailed its next product or monetization strategy but has signaled a focus on long-term sustainability.

Support for Affected Employees

To cushion the impact of the layoffs, Zupee has announced severance packages for departing employees alongside a ₹1 crore medical fund. The company framed these measures as part of its commitment to supporting staff through the transition, even as it recalibrates its operating model.

Industry Backdrop

The employment cuts at Zupee reflect a broader reset underway across India’s online gaming ecosystem. Regulatory changes have prompted widespread restructuring, with firms either shutting down paid gaming formats or hastily pivoting to alternative models. Many companies have downsized, paused new investments, or shifted resources toward products that are compliant under the new framework.

What’s Next for Zupee

With RMG operations wound down, Zupee is expected to concentrate on formats and features that align with the new regulatory landscape, prioritizing business resilience over rapid scale. While specifics remain under wraps, the company has emphasized a disciplined approach to costs and a renewed focus on building for the long term.

Key Takeaways

• Zupee has laid off around 200 employees, about 40% of its workforce, in a new restructuring round.
• The company is exiting real-money gaming in response to the 2025 online gaming regulations that ban paid contests.
• This is the second major round of cuts in a short span, following around 170 layoffs in September 2025, bringing total job reductions to nearly 370.
• Severance packages and a ₹1 crore medical fund have been announced to support affected staff.
• Zupee aims to stabilize operations and pursue a sustainable, regulation-compliant business model going forward.