HP announced a similar plan a couple of weeks ago. The CEO's reduction package speaks for itself...

February 19, 2009 (Computerworld)  Hewlett-Packard Co. has cut about 9,000 employees so far as part of the planned layoff of nearly 25,000 workers that it announced in October. Now HP is reducing salaries and cutting back on travel in an effort to avoid being further wounded by the sharp knife of the economic recession...

Instead of making more job cuts now, HP CEO Mark Hurd said during a briefing on the Q1 results yesterday that the company is cutting salaries, "significantly reducing travel" and eliminating or lowering various types of discretionary spending.

Hurd himself will take a 20% cut on his $1.45 million base salary, for a reduction of about $290,000. But stock awards and bonuses helped to increase his total compensation to more than $42 million last year, according to a filing that HP submitted to the U.S. Securities and Exchange Commission.

HP said in a statement issued after the Q1 briefing that the base pay of other members of its executive council will be cut by 15% and that oher executives will take 10% salary cuts. The base pay of exempt employees -- typically defined as salaried workers -- will be reduced by 5%, and nonexempt -- i.e., hourly -- employees will have a 2.5% reduction.

HP also said that it will cap matching contributions to workers under its 401(k) plan at a maximum of 4% of eligible employee contributions.

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Nope, no deflation here!