HP, Gateway to furlough workers over Christmas holiday

Gateway Inc and Hewlett-Packard Co will require employees not directly involved with customer activities to take five or more days off later this month in a bid to cut costs, the Wall Street Journal reported, citing company spokespeople.

HP will also require contract employees who work at its internal computer operations to take an additional 20 workdays off from Monday.

This is the second consecutive year that the two PC makers have asked non-essential employees to use holiday leave or unpaid time between Christmas and New Year's Day.

Dell Computer Corp and International Business Machines Corp are two exceptions which have not implemented such measures.

The cost cutting comes amid signs of continued weak demand and pricing pressures in what is traditionally the PC industry's biggest selling period of the year.

A spokesman for HP said the company cut about $15m (€23.4m) from expenses last July when it furloughed US contract employees. The spokesman could not estimate the cost savings expected from this month's world-wide furlough, however.

A Gateway spokesman said the mandatory holiday leave is "a way for us to be tight on our costs."

Gateway workers affected by the shutdown include administrative, engineering and executive staffs, while employees in manufacturing, sales and customer support will continue to work between the holidays, he said.