Hewlett-Packard Further Easing Austerity Program

Hewlett-Packard is further easing an austerity program imposed last August, and many of its 84,000 employees will return to full salary and full work schedules, the computer maker said Friday.

General managers at each of the company’s divisions have been given the option of restoring pay levels “where business conditions warrant,” the company said.

The estimated 1,800 workers at the corporate headquarters in Palo Alto already have been returned to full salary.

The announcement is the company’s second modification of a program that required most of its workers to take a 10% pay cut and to take two days off without pay each month. The cuts affected all of its 52,000 workers in the United States and most of its overseas employees.

In January, the company restored half of the cuts. Since then, most employees have been working at 95% pay levels and with one unpaid day off a month.

Some production workers still may be required to take two unpaid leave days, and managers in those sections will remain on 5% pay cuts. The company also said that general managers and other company executives will remain at 90% pay levels.

Hewlett-Packard had sales of $6.5 billion last year.

The booming growth in computer sales slowed in 1985, at a time when the computer industry was expanding its production capacity. Many companies, glutted with inventory, were forced to close plants and lay off thousands of employees. Hewlett-Packard, which also makes scientific instruments, chose to reduce overall expenses rather than impose layoffs and factory closings.

The restoration of pay and full work schedules “is a positive sign . . . but we’re still cautious,” H-P spokeswoman Karen Gervais said.

Also, Gervais said, the company is continuing to curb spending, such as travel expenses, and “we’re very tight on hiring still.”

“This is a sign of some optimism . . . but we’re not out of the woods yet,” she said.