Instead of laying off people during the crisis, HP decided to just cut pay on all executives and employees. In a letter to employees last Wednesday, Hewlett-Packard CEO Mark Hurd announced it’s going to make some salary adjustments across the board.
The full copy of the letter can be found at AllThingsD. A section that outlines the pay cut is below:
We have decided to further variablize our cost structure by reducing base pay and some benefits across HP. My base pay will be reduced by 20 percent. The base pay of Executive Council members will be reduced by 15 percent. The base pay of other executives will be reduced by 10 percent. The base pay of all other exempt employees will be reduced by 5 percent. For non-exempt employees, base pay will be reduced by two-and-a-half percent.
Additional efficiencies, including changes to the US 401(K) plan and the share ownership plan, will also be implemented. Of course, the implementation of all of these actions is subject to compliance with local laws and regulations. Follow-up communications will detail the timing and the plans in your location.
So this looks like a pay cut for the entire global workforce. I guess people would opt for a 5% salary deduction rather than get laid off completely. No confirmation yet if people in the HP Makati office is also affected by the pay cut (though as far as I know it’s against labor code to do so).