Photoshop Jargon: LZW Compression

“LZW Compression” is a standard “lossless” compression method for bitmap images. It can compress files by 50% or more depending on the range of colors in the image: areas of flat color compress better than shades and multiple colors. LZW stands for “Lempel-Ziv-Welch” and uses repeated data strings in the code to achieve its compression, in the same way the GIF file format does.