Nicholas Negroponte has posted a grim message on the OLPC Wiki:
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% 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. We thank team members who are departing for their contributions to this important mission.
Other changes to the project are also planned, including a stronger focus on the Middle-East, Afghanistan, and Northwestern Pakistan, shifting all development of the Sugar OS to the community, and a goal of $0 per laptop for the least developed countries.
Sounds like the beginning of the end for OLPC.