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HP skims another 10% off some EDS workers' pay packets

No joke as US, Puerto Rico staff have April pay cut

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Hewlett-Packard has confirmed its EDS employees in the US and Puerto Rico will have their base salaries cut an additional ten per cent for April 2009 only.

The company told its staff late on Friday that some workers would temporarily suffer a second drop in pay to help HP execs steer the services outfit through tough economic conditions.

“EDS, an HP company, announced plans to take an additional, temporary cost action to keep the organisation strong while increasing financial flexibility,” said HP in a statement.

Base salaries for all US and Puerto Rico-based EDS staff whose annual full-time pay packet is over $40,000, will be slashed another ten per cent on top of reductions made just last month across the vendor’s 300,000-strong global workforce.

“In May, base salaries for US and Puerto Rico employees in the EDS business unit will be reinstated at the levels of base pay prior to this temporary base salary reduction,” said HP.

In February HP's CEO Mark Hurd delivered the sobering news to his staff that he was imposing wide-ranging pay cuts in an effort to prevent further job losses at the firm, which bought EDS for $13.9bn last spring.

Hurd said he was taking a 20 per cent base salary cut, while other execs would see their pay fall by 10 to 15 per cent. Other workers in the US were told their salary would be between 2.5 and five per cent lighter.

Meanwhile, HP has been undergoing the tricky task of convincing its workers in the UK and Europe to voluntarily take a pay cut.

Unlike their US cousins who saw an immediate dent in salary following the company's latest cost-cutting announcement on 18 February, HP's EMEA employees are required by law to give their individual written consent before any salary deduction can be imposed upon them.

All of which might explain why the firm's US employees have taken yet another hit.

Unite HP and EDS national officer Peter Skyte slammed the tech giant's latest cost-cutting strategy.

"We have to assume that this temporary pay cut lasting for a month represents yet another piece of crude and naked financial engineering by HP in advance of the company's 2009 second quarter results to be announced in May. From contacts we have in the US, we know that it has been greeted with incredulity and anger," he told The Register.

He also called on the "Obama administration to act to protect US employees from trigger happy management actions more akin to the Wild West in the 19th century than those of a blue chip technology company with a highly skilled workforce in the 21st century." ®

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