With the global economy facing rough weather, cost cutting has become the new mantra in Business World. Companies across the segments and sectors are trying various measures to rein in costs. From layoffs to issuing hiring freeze to cutting travel costs to giving unpaid compulsory off to cutting stationery and energy expenses, companies are doing all to get a handle on operating expenses. One cost reduction measure that seems to be increasingly becoming common is salary cut. The list of companies announcing a cut in their employees' salaries is growing across verticals. It's no different in IT, where from TCS to Infosys to Microsoft to HP, all have announced a cut in pay packets. Here are the technology companies who have announced salary cuts and freezes to tide over the challenging economy.

Tata Consultancy Services (TCS), India's largest software exporter, announced an across-the-board cut in employee salaries based on the company's performance in the third quarter. The company TCS clipped a portion of the variable pay linked to its performance, effectively reducing an employee’s salary by about 1.5 per cent for the January-March quarter. This is the first time in two years that the IT giant reduced the variable portion linked to company performance. TCS reported a 5 per cent quarter-on-quarter revenue growth and 6.7 per cent rise in net profit for October-December, in line with market expectations. It expressed ‘cautious optimism’ in the face of fears over a US slowdown and reasserted its ability to manage the rise in rupee’s external value. Typically, a TCS employee gets 70 per cent of salary as fixed component and the rest as variable. The latter, in turn, is split into one part linked to individual performance and the other to company performance. The company-related variable in paid in advance each quarter.

India's second largest software services exporter Infosys announced it would pay lower discretionary pay. However, Infosys CEO Kris Gopalakrishnan emphasised that it is not a pay cut but a cut in variable pay. He said that in the wake of the global economic downturn, the company would pay a lower variable pay to the senior management. “It is not a pay cut. The performance of the company is slow, so the variable pay is low for senior management. The executive board members can lead by example. Discretionary pay is going to be lower this time.” The move is likely to hit the senior management most as the variable component is as high as 50 per cent of the total pay packet of Infosys’ senior executives. However, in the case of the junior- and middle-level personnel, this component is around 20 per cent of gross salary. The variable pay is linked to revenue growth and operating margin of the company. Earlier, the company said that the annual salary hike, given in April every year, might be in single digits this year as the company was expecting the slowdown in the IT services to continue. “Owing to slow performance, the increment to employees will be minimal this time,” Gopalakrishnan said. The company also said that going forward, it is going to be 'selective’ regarding recruitments and the company would only recruit for specific requirements based on business demand.

The salary cuts also form a part of cost-cutting measures at software giant Microsoft. The company is slashing overtime, hours and pay for US temporary workers as part of an overall push to curb expenses during the recession. Microsoft will cut what it pays the staffing agencies by 10 per cent for current projects and won't raise the rate it pays for temporary workers who return after a mandatory annual 100-day break. The company also plans to reduce overtime and the total number of hours clocked by temporary workers. In a statement, the company said it talked with some employment agencies before making the decision. The move comes a month after the software maker resorted to its first-ever mass layoffs and said that it would trim travel costs, freeze wages and scale back expansion plans. Microsoft has not disclosed how many contract workers it uses, and analyst estimates vary. According to most analysts, the number is somewhere between 40,000 and 60,000 worldwide. The company employs an additional 95,000 permanent workers globally.

The fraud-hit Satyam too has announced a slew of cost-cutting measures, including a cut in variable pay. The company has withdrawn the variable pay component of all its employees from April 1. However, there is no reduction in fixed compensation. In an email to employees, Satyam CEO AS Murty said that only the minimum guaranteed amount of 25 per cent would be paid towards variable pay for the third quarter (October, November and December 2008) and the fourth quarter (January, February and March 2009) to all associates. He wrote, "A revenue-linked allowance would be introduced from April 1 only for associates working in approved ‘billable’ roles and who were allocated to billable customer projects."

Intel Corp, a bellwether of the technology industry announced a freeze on top salaries and an exchange of "underwater" stock options. Under the plan, the chip maker plans to exchange all but senior executives' "underwater" stock options for options that carry a lower exercise price, becoming the latest corporation to try to compensate employees amid a stock market rout. Intel detailed the plan this week in a federal filing of its proxy statement. The move must be approved by Intel shareholders. The company seeks to exchange options with an exercise price above the stock's 52-week high for a lesser number of new options that have about the same fair value as those surrendered. The plan should be cost-neutral since Intel had accounted for the cost of the options when they were granted. Companies often try to conduct such exchanges as a way to motivate and retain employees, since stock options are part of a compensation package. But they lose value when the market price of the underlying stock falls below the exercise price, which pushes them "underwater."

After missing its quarterly targets, Hewlett-Packard announced that it would slash employee compensation and benefits across globe. The company in an internal email said that the move will save up to 20,000 jobs. Under the new plan, company’s CEO and President Mark Hurd will cut his own salary by 20 per cent, while executive council members will get a 15 per cent cut. Executives will see their salaries drop by 10 per cent, while lower-level employees will receive cuts of five and two and a half per cent. Last week, the company said that it will cut the base salaries of some employees in its EDS business by 10 per cent for the month of April. A company spokeswoman said in a statement via email that the move is a "temporary cost action to keep the organization strong while increasing financial flexibility." The company had earlier announced that 25,000 jobs would be lost as it integrates recently-acquired EDS.