PALO ALTO, Calif. -- Agilent Technologies Inc. today (April 5) announced it was temporarily cutting the pay of all employees by 10% in an effort to avoid mass layoffs and reduce expenses in the current industry downturn.
The pay cut is expected to save Agilent about $70 million per quarter, and it will last at least until the end of July.
"We're trying to avoid across-the-board layoffs in response to cyclical market conditions," said Ned Barnholt, president and chief executive officer of the company, which was spun out of Hewlett-Packard Co. two years ago. "We view the economic slowdown as a business cycle -- even though it's deepening and broadening.
"At the present time, we believe this pay reduction is the most appropriate action for us. We value our workforce and need to be ready to meet demand as business conditions improve," he said.
The pay cut is Agilent's most aggressive move yet in the current downturn. The company said it began to curb hiring and reduced discretionary spending several months ago. In addition to the pay cut, Agilent said it was now stopping external hiring and dramatically reducing its spending, including the purchase of equipment and new office space. It is also limiting travel to customer-related events.
Temporary pay cuts began April 1 for Agilent's 200 senior managers, and the reductions will go into effect May 1 for the rest of the company's workforce. The implementation of the pay cuts will vary by country and it is subject to local laws, Agilent said.
Agilent said the pay cuts will last through the end of the company's fiscal third quarter, which ends on July 31. The pay reductions could be extended into the fiscal fourth quarter, depending upon business conditions, said the Palo Alto company.
