Hewlett-Packard, the largest technology company in the world, decided to cut its employees’ pay in an effort to cope with the current economic situation. All Hewlett-Packard employees received on their PC’s this morning an internal memo from the company’s CEO, Mark Hurd, in which the executive explained why he took the decision to cut pay. 

Hewlett-Packard’s profit in the first quarter of the current fiscal year fell 13 percent. This prompted the giant computer maker to cut its CEO base salary by 20 percent, its other executives’ pay by 10 to 15 percent and the salaries of the rest of the company’s employees by 5 percent.

Mr. Hurd told HP employees that there will be no job cuts in the foreseeable future. Instead, salaries across the board will be reduced. He decided his salary should be reduced by 20 percent as a sign of solidarity with all the people working with HP.

“In an environment like this, there’s no margin for error and no tolerance for inaction,” Hurd wrote in the memo. He added that his actions are aimed at keeping the company’s muscle intact.

The pay cuts come after Hurd announced about 24,700 job cuts in September in an effort to cut costs and to keep the company floating amid the worst economic crisis since the Great Depression.

“At a company-wide level, I don't believe a major workforce reduction is the best thing for HP at this time," Hurd wrote in the memo adding that the pay cuts are an essential move in the ongoing “workforce optimization process.”

Hewlett-Packard stock fell $1.75, or 5.1 percent, to $32.33 in trading before exchanges opened and closed at $34.08 on the New York Stock Exchange yesterday.