Hewlett-Packard Co, the second-biggest computer maker, said it will ask staff to take pay cuts or vacation days between July and October to pare costs.
US employees, about half of the company's 90,000 workforce, can volunteer to take a 10 percent pay cut or eight of their paid leave days during the four-month period, said spokesman Dave Berman. They don't have to take part in the plan, he added.
The Palo Alto, California-based company is on schedule to fire 3,000 of its 14,000 managers by the end of July, which analysts said puts pressure on staff to accept one of the options.
The plan may reduce wage bills and allow the company to slow production while demand is low.
"The top management would take it to demonstrate their commitment to the company -- they would want to be an example," said Pranab Kumar Sarmah, an analyst at Daiwa Institute of Research Singapore Pte. "There would be some savings there but it's difficult to estimate."
Berman declined to be specific on savings from the latest effort to cut costs. Taking vacation days during the period, he said, would help the firm as "accrued vacation is a liability the company carries on its books." Staff can also opt for a combination of a 5 percent pay cut and four vacation days.
Hewlett-Packard also said in January the company would cut 2 percent of its workforce to restructure its marketing arm.
The latest decision underscores the weak demand for personal computers and peripheral products such as printers, forcing manufacturers to fire workers and cut salaries. Last week, Maxtor Corp, the biggest maker of computer disk drives, said it plans to fire as many as 1,500 workers in the US and in Singapore.
Hewlett-Packard sells personal computers, servers, printers and technology services. Chief Executive Carly Fiorina said this month that she was "more cautious" about fiscal third-quarter sales and profit targets set just four weeks earlier. The economic slowdown in the US has spread to Europe, Asia and Latin America, she said.
Sales in the July quarter will be unchanged to 5 percent lower than in the year-earlier period, the company said last month. At the time, Fiorina said she expected the company to meet analysts' profit forecasts of US$0.23 a share.
Hewlett-Packard earlier this month asked workers to take six days off in the second half, reducing travel expenses and overhauling incentive packages for employees to help meet earnings target. The so-called cost savings program may vary in other countries based on local laws, Berman said.
In Asia, Hewlett-Packard workers will be given similar options and may also be asked to give up vacation days. The company is the biggest electronics manufacturer in Singapore.
"We introduced a payroll-savings initiative that asks employees to elect to contribute to the bottom line short- term," said Cecilia Pang, a Hewlett-Packard spokeswoman in Singapore.
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