SAN FRANCISCO, Sept 21 (Reuters) - A leading U.S. charity founded by Silicon
Valley pioneers, the David and Lucile Packard Foundation, said its
stock-based endowment had fallen 60 percent in two years, and it would slash
staff and grants.

The endowment of the charity, named for one of the founders of printer and
computer maker Hewlett-Packard Co. and his wife, has fallen 35 percent this
year and 60 percent since the end of 2000, when it was nearly $10 billion,
the foundation said on its web site, www.packard.org.

It is laying off up to half its staff, slimming to 80 to 110 employees from a
current 160, and next year it will give just $200 million in grants, 20
percent less than in 2002 and 56 percent less than 2001.

HP helped put northern California's technology corridor, Silicon Valley, on
the map, but the region, which boomed in the late 1990s, has been one of the
worst-hit during the economic downturn.

HP's merger with Compaq Computer Corp, concluded in May despite the dissent
of the Packard Foundation and other investors, created further controversy
which hurt the price of the stock that, along with HP spinoff Agilent
Technologies Inc, forms the core of the charity's holdings.

"We are disappointed about the need to make these adjustments," the Packard
Foundation said, but it concluded that the reduced ability to make grants was
"likely long-term".

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