After Zynga Settlement, Layoffs Hit Brazilian Social Gaming Company Vostu

Brazilian social gaming giant Vostu is laying off an undisclosed number of employees, we’ve learned. Vostu, which has raised $46 million from Intel Capital, Accel Partners, General Catalyst, and Tiger Technology Global Management; is one largest social gaming companies in Latin America. The gaming company was founded in 2007 by three Harvard classmates: CEO Daniel Kafie, chief scientist Mario Schlosser, and Joshua Kushner. UPDATE: Vostu has confirmed the layoffs.

It’s unclear what’s caused the layoffs but Vostu is fresh off of a settlement with Zynga over copyright issues. As we’ve reported in the past, Zynga hit Vostu with a massive lawsuit in June of 2011, alleging that the company was copying Zynga’s games. In fact, Zynga alleged that Vostu was copying Zynga’s games so closely that they even inadvertently included the bugs.

Vostu then claimed that Zynga has copied other games repeatedly over the years, including Zynga’s hit game Cityville. Zynga then sued shareholder Google over the dispute, because Orkut, which is popular in Brazil, was hosting the Vostu games that Zynga said were ripoffs.

In December, both companies issued a statement that they had settled the copyright lawsuits and counterclaims against each other in the legal systems in the United States and Brazil. As part of the settlement, Vostu made a monetary payment to Zynga and made changes to four of its games.

Perhaps the layoffs could be a result of the settlement and the legal costs associated with the matter. But Vostu has reportedly been growing in terms of traffic, and launched four mobile games over the past two months (and the company has said that 25 percent of all internet-connected Brazilians play its games). Next month, the company plans to launch two additional games.

UPDATE: Here’s the statement Vostu issued to us on the news: “Vostu grew a significant amount in the last 18 months and is constantly focused on improving efficiency for future growth which includes select and strategic hiring. We are consolidating our game design and development at our new headquarters in Buenos Aires.”