Netbooks causing employee lay-off at Microsoft

Microsoft is planning to lay off around 1800 employees in the coming 18 months. And guess what, they are blamming Netbooks for this. The Microsoft has suffered a painful $465 million hit when it comes to licencing OS to the OEMs.

From Microsoft’s 10-Q filing on January 22:

“The decline in OEM revenue reflects an 11 percentage point decrease in the OEM premium mix to 64%, primarily driven by growth of licenses related to sales of netbook PCs

Who is to blame? I would say that the main candidate is Vista. Vista was slapped onto the netbooks and UMPCs, which actually turned the users off as Vista was not even usable on those devices. That is when the Windows XP came into the game and the users became happy again. The reason was simple: Windows XP could run way better on a then weak hardware.

Hopefully Windows 7 will make things better for the Microsoft. We have already seen many reports of how nice the Windows 7 runs on the low-cost netbooks and notebooks. Now, only if the Microsoft does not charge a bomb to the OEMs for Windows 7, the whole scene can see a positive change in coming months.