Intel

(INTC) - Get Report

said Tuesday it will cut expenses by "hundreds of millions" of dollars this year to focus on long-term growth in an "uncertain economic environment."

The chip maker plans to cut discretionary spending, including travel and overtime, by roughly 30%, said spokesman Tom Beermann, who would not offer specific dollar figures.

Intel, which is based in Santa Clara, Calif., will also impose a strict limit on hiring and hopes to reduce its overall headcount through its normal attrition rate of less than 10% annually.

The company also will postpone senior managers' raises until October. Other salaried employees will receive half their projected salary increases in April and the second half in October.

Tuesday's news comes on the heels of a shaky month for the chipmaking bellwether. On Jan. 16, Intel

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reported fourth-quarter earnings that slightly beat Wall Street's lowered expectations, but said first-quarter revenue would take a 15% sequential dive "due to seasonal factors and the impact of slowing worldwide economies."

The same day, the company announced plans to

phase out operations at its computer systems manufacturing plant in Puerto Rico by mid-2001.

On Feb. 13, Credit Suisse First Boston

downgraded Intel to hold from buy, saying a substantial recovery in 2001 is unlikely.

Shares of Intel dropped $2.63, or 7.6%, to $31.19 in recent

Nasdaq

trading.