According to VentureBeat, online video portal Veoh is laying off a significant portion of its staff. Veoh has struggled to compete with other online video services in an economic downturn where advertising dollars have dried up. The source says the layoffs of about 80 , to be announced tomorrow, may involve some shifts in strategy, though details on that were vague. The cuts would follow a 20-percent workforce reduction in November 2008 and the closing of its Russian office the month before.

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The move highlights the difficulty of operating a large online video site in an economy where advertisers are becoming increasingly frugal. Because it’s costly to stream large video files, video aggregators need to charge higher ad rates than most online publishers to turn a profit. Add to that the fact that advertisers in this environment are looking for the best deals possible (and are getting them in most cases), and it’s not hard to see why Veoh is having trouble. VentureBeat also points out that the site’s traffic has been steadily declining for a few months now as YouTube and Hulu steal share. The company raised $30 million in June 2008 so it should still have cash to ride out the downturn.