Ubisoft has confirmed to Joystiq that "development activities in its Brazilian studios will ramp down by the end of this year." The publisher states that due to the current market conditions, it can't "achieve the goals initially set for the studios." There is no set date when the Brazil shops will close, but it will be before the end of the calendar year.
There are currently 25 people working between the two studios in Brazil, who are "finishing DS and PSP projects which they will see to completion." The company could not confirm the official number of layoffs, as "some" team members may take positions at other Ubi studios.
The Brazil studios had worked on the casual Imagine series, which doesn't currently fit in with the company's focus on major franchises -- a priority for the major, new (subsidized) Toronto studio.
Ubisoft plans to continue its business presence in Brazil and is "currently evaluating opportunities." Overall, the publisher states that its "production headcount" should remain stable this year.