HP Implements Across-The-Board Pay Cuts


How can a troubled corp save money? Well, it can force unpaid time off on employees, like Cisco (CSCO) or Dell (DELL). There’s the mass layoff option, happening at too many companies to list, most notably Microsoft (MSFT).

And then there’s HP (HPQ), which is implementing across-the-board pay cuts. That’s in response to the company reporting a disappointing Q1 late yesterday, missing revenue targets by over $3 billion.

Here’s how it works: The rank-and-file see their salaries drop by about 5%. Executives take a haircut to the tune of 10-15%, and CEO Mark Hurd chips 20% off his base salary.

(Of course, base salary only forms a small part of Mark’s compensation. That cuts at least $290K off Mark’s base pay of $1.45 million, but Mark’s total compensation comes to $42.5 million.)

HP is doing what it has to. But we wonder what’s worse for morale — and for employees — in the long run. The one-time terror of mass job cuts that dumps deadwood, or the lasting pain of a reduced salary that hits everyone?