HP has announced plans to push a five per cent pay cut across its world wide workforce of 300,000 people.
Commenting on worse than expected results, CFO Cathie Lesjak said, “During the quarter, we took a number of actions to reduce expenses…. We will continue to take actions to create a more variable cost structure, including reducing base pay and certain benefits across the company beginning in Q2. "
However, the proposed pay cut has provoked outrage at the Unite union, which represents some of HP’s UK workforce, particulalry those at EDS, which HP has acquired.
Peter Skyte, Unite national officer highlighted the fact that the company was still making substantial profits and said, “UK employees who have made a key contribution to the doubling of the HP services revenue and borne the brunt of redundancies in Europe will be astonished that a company that is increasing revenue and still making substantial profits is seeking a pay cut from its UK workforce.”
Skyte said that although senior executives pay was being cut, “they will more than make up any reduction in basic pay by increases in their executive bonuses brought about by reductions in every one else’s basic pay.”
HP has told the union that any pay reduction will only be instituted with employee agreement and that no coercion will be applied.
“We will be seeking written assurances about this when we meet the company next week,” he said.
The announcement was made as part of the HP reporting of its first quarter results for 2009, with revenue growth of one per cent compared to last year to £20bn, with profits of £1.3bn.