HP asks entire workforce to take pay cut

Company looks to save $100m

Hewlett Packard (HP) has asked its global workforce to take voluntary 10 per cent pay cuts from 1 July to 31 October in an attempt to save $100m (£71m).

All 80,000 employees, including the company's 3700 UK staff, had until Monday (9 July) to decide whether or not to take the cuts. According to HP, 23,000 staff had made a decision by last Friday, with 93 per cent opting to take the decrease. Workers' decisions will be kept confidential.

In a statement the company said: "The IT spending slowdown that began in the US in December 2000 continues to spread globally. As a result, HP is taking additional long- and short-term actions to ensure that we become more cost-competitive, while working to increase revenue. We remain confident that our strategy is the right one."

Chris Jones, senior analyst at Canalys.com, said: "This is a way of cutting costs without losing jobs. The company traditionally has long-serving employees and, given the state of the market, staff are likely to grin and bear it."