HP announces pay cuts for employees

Bangalore: The world’s largest PC maker Hewlett-Packard has decided to reduce employee compensation and benefits to increase flexibility in the company’s cost structure.

The company’s move to cut employee compensation would affect its employees in India, where the company has some 60,000 employees, including the EDS staff.

An employee with HP confirmed that they have received communication from the company regarding pay cuts.

Special: Financial crisis | Special: Global job cuts

The company would cut its chief executive’s base pay by 20 per cent and its executive council members’ base pay by 15 per cent, it said during the first quarter earnings call.

Other executives would see a reduction of 10 per cent in base pay, while there would be a cut of five per cent to two-and-a-half per cent for other employees depending on their job levels.

“While the actions that we are taking today are difficult, we believe they will allow us to emerge from this recession in a powerful position to create value for our customers, employees and shareholders over the long term and be in a better position to fund 2009 bonus programmes,” the company said in a statement.

'More companies to freeze executive pay this year'

HP said the cost actions are a result of the current economic condition and its effect on the company’s revenue. These changes would help HP execute its strategy of driving innovation, strengthening customer relationships and investing for growth, the company said.

In the first quarter ended January 31, HP’s net profit was down about 13 per cent, largely due to weak sales of printer, personal computers and servers, media reports have stated.

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