In light of the highly uncertain global economic conditions, Hewlett-Packard, world’s largest PC maker, has instituted pay cuts for all of its employees worldwide.

Almost all departments, including sales and administration divisions, will be affected by the company's "work-sharing" plan, initially implemented for certain workers and factories, in order to avoid layoffs.

The company, however, feels that a company-wide workforce reduction is not the best solution for the current global economic crises.

According to the media reports, the US based PC company had announced pay cuts including a 2.5 per cent reduction for hourly workers, 5 per cent for salaried workers and 10 per cent to 20 per cent for executives.

Mark Hudd, CEO, HP is giving himself a modest 20 per cent pay cut (he earned $42.5 million in total compensation last year) and the pay cuts decrease from there.

Hudd said, "To give you a little insight into my world, after we report our earnings, we engage in a dialogue with analysts and investors. They’re going to ask what we’re doing in light of the current environment to right-size these businesses.”

However, Hudd feels that the condition of the company is "fundamentally sound".

It can be here recalled that as compared to the last quarter the sale of HP desktop had declined by nearly 25 per cent this quarter.

HP is the largest technology company in the world and operates in nearly every country. The company specializes in developing and manufacturing computing, storage, and networking hardware, software and services.