According to wikipedia $\mu$-law is: $$F(x) = \operatorname{sgn}(x)\frac{\ln(1+\mu|x|)}{\ln(1+\mu)} \qquad -1\le x \le 1$$
where $μ = 255$ ($8$ bits) in the North American and Japanese standards (This is a signal processing algorithm).
What operation is being performed in the $\mu|x|$ portion of the above algorithm?