No wonder there's been so much buzz about layoffs at Microsoft: PC sales just stank in the last quarter.

Mirroring the awful fourth quarter for overall retail sales, PC sales fell 0.4 percent in the fourth quarter, according to a new report from research firm IDC.

The holiday season drop pulled annual PC sales growth down to 10.5 percent, after averaging 15 percent a year over the last five years.

"As expected, demand for PCs in the U.S. faced a challenging environment, with a substantial reduction in spending among both consumer and commercial segments amid tightening credit, eroding confidence, and growing unemployment. Not only unit growth was constrained, but the value of the market also shrank as a result of competitive pricing and the introduction of lower-priced mini notebooks,'' IDC's Doug Bell said in the release. "Unfortunately, the first half of 2009 looks pretty shaky as the economic fundamentals need to recover before spending on PCs will resume."

Also released today was the annual PC sales report from Gartner, the other big tech research firm. It said the PC industry "suffered its worst growth rate since 2002" in Q4 with shipments increase just 1.1 percent, to 78.1 million units. For the year, Gartner estimated PC sales grew 10.9 percent to 302.2 million units sold.