OLPC Sacks Half Its Staff, Reboots Mission

The initiative, which in late 2005 unveiled its first working prototype of a low-cost laptop for children in developing countries, had been struggling for months to avoid layoffs, according to a blog post on the OLPC Web site.

"Like many other nonprofits that are facing tough economic times, One Laptop Per Child must downsize in order to keep costs in line with fewer financial resources. Today we are reducing our team by approximately 50 percent and there will be salary reductions for the remaining 32 people. While we are saddened by this development, we remain firmly committed to our mission of getting laptops to children in developing countries," Negroponte wrote in an announcement reprinted on the OLPC blog.

Part of OLPC's "new path" will be to develop and distribute a free notebook, or "$0 laptop" to "least developed countries," according to Negroponte's announcement.

OLPC is widely credited for breaking open the growing netbook market and has delivered laptops to 500,000 children around the world, according to Negroponte.

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But the initiative has not yet realized an initial pledge to deliver a sub-$100 laptop. OLPC XO-1 laptops are currently priced at $199 for a single unit through the initiative's latest "Give A Laptop, Get A Laptop" program. That program's reciprocal offering began Nov. 17 and ended Dec. 31, during which period donors could pay $399 to send one XO-1 to a child in a developing country while receiving a second for themselves.

Last May, OLPC announced it was planning to build the X0-2 by 2010 with a price tag of $75. While it is unclear whether that road map is still operative, Negroponte on Wednesday wrote that going forward, OLPC would focus on "development of Generation 2.0."

One OLPC competitor claimed that the initiative's troubles were less a result of difficult economic times than the predictable result of bad initial decisions.

"It's easy for OLPC to blame the downturn, but their efforts, while noble, have been fraught with difficulties from the start. The business model simply doesn't work," a spokesperson for thin-client vendor Ncomputing told ChannelWeb Wednesday.

Ncomputing sells virtualized desktop hardware and software in developing countries and elsewhere. The spokesperson said the company says it can deliver "a $70 PC to developing nations as well as cash-strapped U.S. schools and organizations" and has sold more than 1 million in 100 countries in less than two years.

Ncomputing was recently joined by executives Lindsay Petrillose, formerly of OLPC, and Mark Beckford from Intel's Classmate program, another OLPC competitor.

"OLPC promised a product, a sub-$100 laptop, it simply can't deliver based on underlying economics of the computer industry. And it asks governments already unable to provide basic services to not just buy these laptops but pay to ship them from the factory, truck them throughout the countryside to the schools and then support and maintain them. The hidden costs were a nightmare," the Ncomputing spokesperson said.