As well as the depature of Volpi, the company is making a number of its 100 strong workforce redundant.
Writing on the company blog, out-going CEO Volpi said: "Today we've decided to make some changes. In these tough economic times, it's been increasingly challenging to operate as an independent, ad-supported online video platform."
Volpi, a former Cisco Systems executive, will be replaced by Matt Zelesko, the current senior vice president of engineering at Joost. Volpi will remain active chairman of the board.
The company said it plans for a major reorganization and restructure, which will result in some layoffs in its main offices based out of New York and London.
The company said its portal would remain open, but will now focus providing "end-to-end, cost-effective video for media companies" around the world that are embracing online video and are looking to build a branded experience for their content.
Joost, which was founded by the duo behind Skype and Kazaa, Janus Friis and Niklas Zennstrom, failed to find its footing since its much-hyped launch in 2007, consistently losing market share to competitors Hulu and YouTube.
At launch, the service encumbered users by requiring them to download the Joost player to watch videos. Instead, users flocked to other services, largely Hulu, which allowed free video streaming through web browsers.
Depsite this, Joost was able to sign on a number of large content providers, including Viacom, and eventually opened up its service to browser streaming, but by then it was too late, as consumers had settled in elsewhere.
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