Its third quarter under pressure, Hewlett-Packard (HWP Quote - Cramer on HWP - Stock Picks) is asking its employees to take one for the team.
H-P said Friday that it has asked all of its employees to take either a pay cut or unused vacation days as part of the company's continuing efforts to clamp down on costs. "These are short-term actions to increase the likelihood that we will hit our third-quarter estimates," said spokesman Dave Berman. The company's third quarter ends in July. Analysts expect H-P to earn 20 cents a share, according to
Thomson Financial/First Call.
Berman said that the company had offered employees three choices: Take a 10% pay cut, starting July 1 and extending through Oct. 31; take eight days of accrued, paid vacation leave; or take a 5% pay cut and four days of vacation. The company says the program is voluntary -- employees don't have to participate if they don't want to -- and that choices will be made anonymously. "We have a tradition of H-P employees pulling together in difficult times," said Berman. "We think that they'll do it again."
Unused paid vacation time is recorded as a liability on a company's balance sheet.
The program involves all of H-P's U.S. employees, including CEO Carly Fiorina, who earned $1 million in salary in 2000. For that fiscal year, Fiorina voluntarily returned her second-half bonus of $625,000.
H-P isn't the only tech company battening down the hatches.
Compaq (CPQ Quote - Cramer on CPQ - Stock Picks) said Wednesday that it had asked nearly everyone in its U.S. workforce to take the week of July 2-6 off as mandatory paid vacation.
Sun Microsystems (SUNW Quote - Cramer on SUNW - Stock Picks) also has set plans to shut all of its U.S. operations that same week.
Thomas Lepri
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