The company confirmed the layoffs but declined to say how many people had been let go or why the layoffs were necessary. It shows that even in fast-growing emerging markets, companies have to grow carefully or reset their strategies as the market changes.
In a statement, a Vostu spokesman said, “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.”
The company will continue to have offices in New York and Sao Paulo, Brazil. Vostu has raised $46 million to date from Intel Capital, Accel Partners, General Catalyst, and Tiger Technology Global Management.
The firm was founded in 2007 by chief executive Daniel Kafie, Mario Schlosser, and Joshua Kushner. It grew up to be one of the largest social gaming companies in South America.
The company made casual social games and was sued in June 2011 by Zynga, which accused Vostu of outright copying Zynga’s games such as FarmVille. Vostu settled the case in December and made a monetary payment to Zynga. It also changed four of its games. Vostu’s traffic on Facebook grew in 2011.
Vostu has a couple of new games coming out soon. It has also made a foray into mobile games.