No raise for Hewlett-Packard employees

If you are a Hewlett-Packard employee, you don’t have a raise coming your way. According to an internal memo, the company plans to use the funds meant for raises and bonuses to fund pension plans and other benefits. Interestingly, the memo also indicates that the upper management has nothing to worry.

Employees have been notified by e-mail that they won’t receive a salary increase in fiscal 2009, which began in November. The world’s largest personal-computer maker is freezing salaries as part of Chief Executive Officer Mark Hurd’s efforts to contain costs. The company has already gone ahead and cut jobs, closed offices and merged data centers to lift profit. It is also 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. “HP 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, the shares have dropped 34 per cent this year.

Hurd, who became CEO in 2005, received $25.3 million in total compensation in fiscal 2007.

Source: Economic Times