HP asks UK employees: "Can we cut your pay by 5%?"

HP : "Flight to quality will secure our markets"

HP is to have personal conversations with all its employees in Europe to ask for consent to cut their pay by five per cent.

The IT giant announced plans last week for its global workforce to take a salary drop after revealing first-quarter profit down 13.5 per cent.

But European employment laws mean the company needs to gain staff agreement - unlike in the US where the cuts can be brought in unopposed.

"We're attempting to stop layoffs. Cost actions need to be taken, so we're inviting top-level executives to take a 20 per cent pay cut, second line managers – including [HP UK and Ireland managing director] Steve Gill - to take a 10 per cent pay cut and other employees, a pay cut between 2.5 and 5 per cent," said an HP spokeswoman.

Some administrative and support staff will not be asked to take a pay cut, she added.

HP insisted that no coercion will be applied during the one-to-one discussions, in response to critics suggesting that employees who do not agree to the pay cut could be first in line to be laid off.

"I don't think anybody could predict when the recession would come. Now we have to plan for uncertainty – but we believe we're in a strong position," said Gill.

In a press conference today, Gill defended HP's performance, while admitting that the supplier's first-quarter results globally showing product revenue declining as much as 19 per cent were reflected in the UK arm of the business.

"But we grew market share in those declining markets," he said.

"And we think there'll be a 'flight to quality', with customers looking for partners who'll still be around in five to 10 years' time."