HP managers to take pay cut

Hewlett-Packard has asked about 2,400 managers to take a temporary 5 percent pay cut, and the company will close its U.S. offices for four days between Christmas and New Year's as part of a cost-cutting campaign, a spokeswoman confirmed today.

The moves come less than two weeks after HP warned that its third-quarter financial results likely will fall below Wall Street's estimates. Based on figures from May and June, the company's earnings are expected to be "flat to moderately lower" compared with the third quarter of 1997, HP said at the time. HP also had warned that its second-quarter earnings would fall below expectations. Like other computer and electronics companies, HP has been hit by the Asian economic crisis and PC price wars.

"All of this is being done to help the company get its costs and expenses in line to better meet revenue expectations," a spokeswoman said, confirming a memo that has been circulating within the company.

The pay cuts apply to mid- and upper-level managers, dubbed "functional" managers, the spokeswoman said. They will become effective in August and will last about three months.

HP also has asked its offices elsewhere around the world to close for a period comparable to the Christmas and New Year's break in the United States.

The company already has been in a cost-cutting mode, the spokeswoman added. After HP's second-quarter earnings were announced, it tightened hiring, cut back on travel expenses, and even canceled some company picnics.

HP last implemented similar measures in 1991 and again in the mid-'80s, the spokeswoman said.