Intel is the latest technology giant to announce retrenchment plans. The company said today that it will make only "key strategic technical and engineering hires" and that it hopes to reduce the workforce.

Overtime will also be restricted, and Chipzilla's free-PC program for its employees has also been deferred. Senior management will have their Spring performance-related pay rises deferred, while salaried staff receive half of their top-up.

Intel said key R&D areas were unaffected.

Sun Microsystems yesterday introduced a recruitment freeze and spending cuts, and similar moves have been introduced at Cisco and Hewlett Packard. While the outlook is tepid for the business systems sector, it's much worse for the leading PC manufacturers who have announced deep layoffs in recent days. Intel straddles the two: demand for its network and server businesses remains stronger than for retail PC sales.

Even Microsoft, which earns more in interest and dividends from its $20 billion cash and investments pile than it does from any other area of its business, has felt obliged to appear in a hair shirt in recent weeks. ®

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