Video-compression provider On2 Technologies says it has slashed its staff by 40 percent, citing financial woes. On2 said last week's layoffs were made because of a likely reduction in the amount of the financing the company could receive under its equity line of credit as a result of a weakness in the company's stock price. On2 said it had $1.2 million in first-quarter revenue. Its $700,000 monthly operating costs, excluding depreciation and amortization, will be reduced to $400,000 as a result of the layoffs. On2 said most positions were cut in support, business development and marketing. The company has 30 remaining employees.
Last month, New York-based On2 unveiled plans to blend its video codec with Ogg Vorbis, a royalty-free alternative to the MP3 format. The company has also released updated versions of its technology VP4 and VP5, which On2 licenses and still remains to be a source for its revenue.