Employees at the new Compuware building in downtown Detroit are concerned over their future after some learned their paychecks would be getting smaller, Local 4's Business Editor Rod Meloni reported.

Compuware announced last week it lost $8 million in its second quarter.

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Compuware Employee Talks To Local 4

The company's chairman and chief executive officer, Peter Karmanos, said, in response to the loss, the company would cut $10 million to $15 million in costs to avoid resorting to layoffs.

Karmanos has reportedly stuck to his promise, but his 9,000 employees are shocked and angry, while the surrounding community is left to wonder about what happens if Compuware doesn't make it.

Outside the new Compuware headquarters on Tuesday, Borders Books employees eagerly moved in their inventory, anticipating their opening in the coming weeks. Inside the building, Hard Rock Cafe workers optimistically installed the restaurant's famous logo on the stage.

But amidst the excitement going on downstairs, employees in the upper floors appeared stunned as they stared out the glass windows, contemplating a difficult future, Local 4 reported.

On Tuesday morning, Karmanos reportedly sent employees an internal memo that stated:

Compuware's senior executives, myself included, have taken significant pay cuts ... now, I ask you to join me.

Calling Compuware's salaries "inflated," Karmanos cut everyone's pay, Local 4 reported.

Effective Saturday, all account and project managers and other professional services workers will lose 10 percent of their pay, according to the station's reports. If they're not working hours billable to a client, their pay will be cut 50 percent.

Other workers making $60,000 per year or more will reportedly face pay cuts of 5 percent.

One Compuware worker, who chose to remain anonymous, told Local 4 he lost 10 percent, or approximately $4,000 a year.

"Possibly I have to get a second job. My wife already works a part-time job at nights," the worker said. "I wouldn't like to put them out and say they're this evil corporation, but definitely, somebody's got to step up and take a close look at how they're running things."

Local 4 learned the following additional cuts would be made:

Compuware's standard health care plan -- which previously did not require monthly payments -- will now require employees to pitch in for their medical treatment.


Starting Jan. 1, the company will no longer reimburse workers for mileage when driving to client locations.


Holiday parties will no longer take place, and Karmanos suggested that potlucks be held during lunch hours only.


The company also plans to cap cell phone reimbursements.

By making the proposed cuts, Karmanos (pictured, right) said he expects to save $10 million to $15 million. The CEO added that, "Implementing these measures will allow Compuware to save jobs."

Comerica Bank chief economist David Littmann was not so optimistic about the company's future, Local 4 reported.

"If it were to continue for a full year, they'd be very vulnerable to takeover, or to go the way of Kmart," Littmann said. "They had all these grandiose plans, moving into the city -- granted, to be closer to some clients -- but the customers themselves, the city of Detroit, are in the hole $200 million and rising."

Local 4 apparently made repeated calls into Compuware, but did not receive a response.

Contacts made to the office of Detroit's Mayor Kwame Kilpatrick -- inquiring as to whether he was concerned about Compuware's cuts -- also failed to receive a reply.

Karmanos reportedly makes $950,000 a year, but after a 67 percent pay cut -- which means he gives back $636,000 -- his salary is expected to be reduced to $313,000.