As the UK's finances deal with body blow after body blow, with even the chief executive of Starbucks weighing in to talk down the economy – presumably from 'Grande with Cream' to 'Tall and Skinny' – hardware and services giant HP says it will cut staff wages.

The Palo Alto-based giant has said it plans to trim salaries by an average of five percent rather than contemplate new tiers of redundancies. Executive salaries will be reduced by 10-20% as part of the strategy.

Last autumn the company announced 25,000 layoffs in the wake of its purchase of EDS, and says that 9,000 of those jobs have already gone.

HP announced this week that revenues are slightly up, but year-on-year profits have fallen by 13%, with its cash-cow hardware businesses most seriously impacted. Those results were broadly in line with analyst expectations.

However, HP's services revenues ballooned with a 113% increase, mainly due to the EDS acquisition last year. Outsourcing is keeping HP in the black.

CEO Mark Hurd told analysts that services moved "counter cyclical" to the rest of the economy as companies turned to companies like HP to help them slash costs.

He also hinted that HP may be benefiting from Satyam's troubles in India.

In a company email leaked to the press Hurd said wage reductions were planned to avoid further job cuts.

"When I look at HP, I don’t see a structural problem of that magnitude," he said. "There are pockets where restructuring needs to happen, and areas where actions will be taken as part of our ongoing workforce optimisation process. But at a company-wide level, I don’t believe a major workforce reduction is the best thing for HP at this time."

Hurd will take the biggest salary cut of 20 percent, with senior executives losing 10-15% of their remuneration, and other employees 2.5-5% out of their wage packets.

In the UK, union Unite has reacted angrily to the proposal saying that workers would "be astonished" that a corporation posting profits in the billions would propose to slash salaries.

Once again, it seems, outsourcing and UK jobs are butting heads in the national press.