EDS staff face third round of pay cuts

HP is planning further cost-cutting measures at EDS

Staff at HP's EDS unit are facing a third round of pay cuts in a year as the company seeks to further economise, according to local media.

HP announced salary cuts in February ranging from 2.5 per cent to 20 per cent, with top executives taking the biggest cuts, and an across-the-board cut of 10 per cent for one month in March.

An additional round is planned that will reportedly see some staff losing 30 per cent of their salaries. The move has provoked anger and despair.

"I have been with EDS for almost 15 years, and the pride I once had in being a part of this organisation has slowly and now surely become embarrassment and disgust," a staff member told the Dallas Morning News.

"I know that my career with this company is coming to an end. I can't survive after this kind of hit."

There has been tension over wages ever since HP took over EDS. HP chief executive Mark Hurd said in February that he would take a 20 per cent cut in his salary, but his $1.45m (£866,000) pay packet in 2008 made up a tiny proportion of his total annual compensation of $42.5m (£25m).

HP has said that its actions are designed to ensure that the company hits its financial targets, and will eliminate the pay disparity between staff at EDS and HP with the same experience and job positions. HP has said in the past that it is better to cut pay than make people redundant.

At present the pay cuts appear to affect employees in the US and Puerto Rico, but overseas staff may also face wage pressures, depending on whether local laws allow HP to arbitrarily cut staff.

HP reported a net profit of over $1.7bn (£1bn) for its second quarter this year and will announce its third-quarter results on 18 August.