HP FREEZES WORKER SALARIES

[Anonymous]

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.GzJm7bmhck&refer=home
HP freezes worker salaries
Dec
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
2007.

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
Last
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.

[Author]

December 8, 2008 at 10:42 AM