Unlike other companies who had to reduce the number of their employees, Hewlett-Packard CEO Mark Hurd chose not to. Instead, they have decided to just cut the pay of employees across the board.
The whole memo can be found at All Things Digital. Meanwhile, the portion that announces the pay cut says the following:
“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.”
As you can read, the cut will be for the global HP, starting with Mark Hurd himself. Being an employee of it’s Philippines ROHQ, I myself don’t know how to react to such an announcement. I must admit that it shocked me upon reading it. Perhaps I’d agree that it’s better to have a 5% salary deduction rather than removing thousands of employees from the organization.
Local announcements haven’t been communicated to us, but I hope everything will be for the better (in a long-term basis). I trust that the HP management is smart enough to act on this matter.
(Thanks to Noah Berger of The New York Times for the image above.)
