Io was loved by Jupiter who transformed her into a heifer (on left) to protect her from Juno's jealousy. Juno, discovering the heifer's identity, had it guarded by Argus Panoptes ('many-eyed Argus'). Mercury was sent by Jupiter to kill Argus, which he did, after piping him to sleep. (Ovid, 'Metamorphoses').
This is among Loth's earliest Venetian works. The darkened sky as Mercury begins to pipe makes it a dramatic and sinister depiction of the subject.