It mystifies me that cutting pay instead of getting rid of deadweight is seen as noble or honorable.
If I were working at HP, I would have quit the second they decided to cut my pay just so they could avoid needed firings.
I sympathize with your viewpoint, but I think it depends on whether you see dead weight. If you are on a great team with no dead weight, a pay cut to keep everyone together would be far more palatable.
Even if that equity is depressed in value for a bit. `Bailing-in' creditors is actually a common technique for financially struggling companies. Employees are a kind of creditors.
Ditto for GM when they offered all union employees the same (formula for) buyout from their contracts -- the best ones take it and leave because they'd get the money and the new job; the poor performers know they can't last anywhere else and stay on.
Hell, for that matter, why do you assume that you wouldn't have been among those deemed "dead weight" and laid off?
I've never seen any large company which didn't have at least some employees whose value was less than their salary. Frequently, such employees can even confer negative value.
Moreover, even if you don't have any deadweight, you do have an ordering of employees. Your top employees are the ones most able to find a job elsewhere and hence very unlikely to accept a pay cut.
> Hell, for that matter, why do you assume that you wouldn't have been among those deemed "dead weight" and laid off?
I don't. Even if I were supposedly in the "dead weight" I would rather be laid off, get severance, and find a new job which would pay me the salary I had negotiated previously. A pay cut is changing the terms on which I agreed to work and would frequently push the job below my BATNA.