OnLive let go "at least 50 percent" of its staff today, Engadget learned, and the company was purchased by an unknown third party. A former employee confirmed layoff reports that popped up earlier this afternoon and recounted the events that led to today's firings.

A meeting held this morning by CEO Steve Perlman informed employees that "at least 50 percent of the staff" were to be cut, effective as of 4PM PST today. Employees affected in the layoffs are said to have not been offered severance.

Moreover, OnLive was bought out by an unknown third party, and an unknown amount of employees will be offered jobs at the newly formed company. It's unclear why OnLive is suddenly shedding so many employees, but the former employee pointed out monthly operating costs of approximately $5 million as at least part of the reason.

For its part, OnLive isn't confirming any layoffs. "We don't respond to rumors, but of course not," a company rep told Joystiq earlier today regarding reports that the company's entire staff was laid off. Reps wouldn't confirm whether other layoffs have occurred.

Vizio's Co-Star player is the latest product featuring OnLive – it's unclear how, if at all, it will be affected by today's layoffs, not to mention the purchase of OnLive by a third party.

This article was originally published on Joystiq.