Election Section

HP asks workers to take cuts

The Associated Press
Saturday June 30, 2001

PALO ALTO — Computer and printer giant Hewlett-Packard Co. has asked its 45,000 U.S. employees to take pay cuts or use additional vacation days in an effort to trim costs. 

According to a memo released Thursday, employees have three choices: a 10 percent pay cut, eight additional paid vacation days, or a 5 percent cut and four additional vacation days. The program is not mandatory. 

The vacation must be taken before the end of October, when HP’s fiscal year ends. The pay cuts would last through Oct. 31. 

Accrued vacation days are a liability, the company says, and the program would help HP save money. 

The company has been hard-hit as demand for personal computers, peripherals and servers collapsed amid the economic downturn. 

Analysts expect Hewlett-Packard to earn 20 cents a share for the third quarter, which ends July 31, and 30 cents a share for the fourth quarter ending Oct. 31, according to Thomson Financial/First Call. 

A year ago, the company earned 49 cents in the third quarter and 41 cents in the fourth quarter. 

In January, HP announced it was cutting 1,700 marketing positions. Four months later, HP said it was trimming 3,000 management jobs. The company currently employs about 90,000 people worldwide. 

International employees also will be asked to make sacrifices, but their choices will depend on local labor laws. 

Shares of HP were up 9 cents, to $27.34, in early afternoon trading Friday on the Nasdaq Stock Market. 


On the Net: 

Hewlett-Packard: http://www.hp.com