Hewlett-Packard Postpones Pay Raises

November 8, 2001 (PLANSPONSOR.com) - After already delaying raises for its employees, Hewlett-Packard has decided to suspend pay increases until its business recovers from the slump in technology spending.

The move is the latest in a series of cost-cutting initiatives at the company, including twice asking workers to use up vacation time, according to CNET news. HP has also had several rounds of job cuts, including some made last week and 6,000 cuts earlier this year.

The decision to suspend raises also comes as HP is trying to shake off a barrage of negative reactions to its proposed merger with Compaq Computer.

A representative for the company reportedly confirmed that the company sent a memo out last week announcing the freeze in raises. In December Hewlett-Packard said it was delaying raises by three months. Some of those raises are expected to go into affect this year but all new raises starting from those delayed from this month until February of 2002 are on hold indefinitely.

The memo also pinpointed the effects of September 11 on the global economy as a reason for the company’s decision, according to the report.