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 user 2008-12-08 at 10:42:41 am Views: 42
  • #20819

    HP freezes worker salaries
    08– Hewlett-Packard Co., the world’s largest personal-computer maker,
    is freezing salaries as part of Chief Executive Officer Mark Hurd’s
    efforts to contain costs, people familiar with the plan said.Employees
    have been notified by e-mail that they won’t receive a salary increase
    in fiscal 2009, which began in November, according to two people who
    asked not to be identified because the message was confidential. The
    only exceptions will be in countries where pay freezes are illegal, the
    two people said.Hurd has cut jobs, closed offices and merged data
    centers to lift profit, even as he expands through acquisitions.
    Hewlett- Packard also is limiting travel, curtailing hiring and
    eliminating “favorite science projects” to save on research costs in
    2009, Chief Financial Officer Cathie Lesjak said last month on a
    conference call.Hewlett-Packard, which has 320,000 employees, declined
    to confirm the salary freeze. “In this difficult macroeconomic
    environment, we believe it is prudent and responsible to reduce costs
    where possible,” said spokeswoman Emma McCulloch. “H-P has a
    longstanding and disciplined approach to managing costs in order to
    invest in the company’s growth.”Hewlett-Packard, based in Palo Alto,
    California, fell $1.43 to $33.39 at 4 p.m. in New York Stock Exchange
    trading. The shares have dropped 34 percent this year.Hurd, who became
    CEO in 2005, received $25.3 million in total compensation in fiscal

    Tighter Budgets
    Worldwide technology spending growth
    will slow to 2.6 percent next year, less than half the rate initially
    predicted, research firm IDC said last month. Growth in the U.S. will
    decelerate to 0.9 percent, the Framingham, Massachusetts-based company
    estimated.The company also said it will only hire workers for
    “revenue-generating positions,” reduce spending on contractors and
    limit travel to customer-related activities, according to the e-mail, a
    copy of which was obtained by Bloomberg News.“These are difficult
    actions, but necessary in the current environment,” said the message,
    which was distributed by Hewlett-Packard’s division
    chiefs.Hewlett-Packard’s PC sales, which account for about a third of
    revenue, rose 10 percent to $11.2 billion last quarter, beating some
    estimates. Demand for notebooks offset declining printer sales in a
    shrinking economy. The company is the world’s top printer maker and
    also sells software, server computers, storage devices and services.

    Profit Forecast
    month, Hurd forecast a rise in profit to as much as $4.03 a share this
    fiscal year, more than the $3.89 anticipated by analysts in a Bloomberg
    survey. Investors took that as a sign the company is prepared to
    squeeze more profit out of sales as customers reduce spending.“It will
    be a challenging environment and we’re planning on such,” Hurd, 51,
    said on a Nov. 23 conference call with reporters. “We can only control
    the things we can control, which is our cost structure and the
    competitiveness of our products.”This week, Hewlett-Packard raised $2
    billion in debt to help fund its $13.2 billion purchase of Electronic
    Data Systems Corp. It acquired that company in August to expand its
    services business.