Gameloft has confirmed that 20 production staff have been laid off from its Brazilian studio, but the publisher says it's far from pulling out of the country.

After hearing rumours that the studio had been closed, we contacted Gameloft to get its side of the story. "Gameloft's staff comprises 4,000 people, among which 80 per cent are in production," says head of communications Anne-Laure Descleves.

"We are suppressing some 20 production positions in Brazil because we need to adjust our production organisation. Serving a market of 1,200 phones and 180 carriers with 300 games is rather complex, and sometimes requires some modifications."

There's been a lot of talk recently about Latin America being a source of big potential growth for mobile games, so the news is a surprise in that regard. However, Descleves says the publisher isn't pulling out of Brazil.

"We are not closing our Brazilian subsidiary," she says. "On the contrary, Brazil is an important market, and we intend to strongly increase our sales over there, in Brazil and all over Latin America. We will continue to offer our games in Brazilian, and for all local handsets."

The Brazilian studio had developed Gameloft's Ferrari World Championship game, and according to one former employee, was working on up to five new titles as recently as September, including iPhone games.

However, Descleves says this isn't the start of wider cutbacks within Gameloft's famously large development pool.

"Our 3,300 developers are vital to produce great quality games and adapt them on all markets," she says. "Our strategy to invest in a strong production force is more than ever important."