HP to cut staff wages by 5% as print revenue drops

The cuts come as revenue within HP’s Imaging and Printing Group dropped 19% to US$6bn (A$9.3bn) in the first quarter to 31 January 2009.

Supplies revenue in the group was down 7%, and commercial hardware revenue and consumer hardware revenue dropped 34% and 37%, respectively.

The manufacturer recorded a 33% dip in printer unit shipments and commercial printer hardware units were down 39%. Operating profit for the group was US$1.1bn ($A1.7bn) – equivalent to 18.5% of revenue.

However, for HP as a whole, first quarter revenue grew 1% to US$28.8bn (A$44.8bn), while profit dropped 13.5% to cent to US$1.85bn (A$2.88bn).

Services revenue also increased, standing at US$8.7bn (A$13.6bn), with a growth of 116% fuelled by the previously announced acquisition of EDS.

To help cut costs, the company revealed it is to slash its chief executive’s base pay by 20%, executive council members’ by 15% and other executives’ base pay by 10%. Other staff face pay cuts of between 2.5 and 5%.

HP said in a statement: “While the actions that we are taking today are difficult, we believe they will allow us to emerge from this recession in a powerful position to create value for our customers, employees and shareholders over the long term and be in a better position to fund 2009 bonus programs.”

According to a recent SEC filing, chairman and chief executive Mark Hurd (pictured) made US$42.5m (A$66.2m) in the 2008 fiscal year, of which just US$1.45m (A$2.26m) was his basic pay rate, which will be subject to a cut. Based on this, Hurd’s overall pay has been cut by just 0.68%.

Read the original article at www.printweek.com.

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