If you're a user of the on-demand video gaming service there's no need to worry, at least for now. A spokesperson for OnLive CEO Steve Perlman said the company will continue to operate its OnLive Game and Desktop services during the transition and the new company is well-funded.

OnLive said in a that "the new company is hiring a large percentage" of its staff across all departments.

"All previously announced products and services, including those in the works, will continue and there is no expected interruption of any OnLive services," the statement said.

The blogosphere was abuzz Friday with reports that OnLive had fired most of its staff and several the Palo Alto, California-based company carrying boxes.

Later reports indicated that Perlman held a meeting with employees and told them that at least half of the staff was to be let go. Reportedly, he also said OnLive would be filing for called Assignment for the Benefit of Creditors, which protects companies in financial trouble from creditors.