You have to be much more careful about where you are spending that cash. Finding places to cut spending is fairly simple, Smith said. Companies simply go down their lists of check payments and start asking tough questions about whether each check is critical to the survival and growth of the company. Business consultants and accountants say most of the austerity measures being applied in the tech downturn aren't new. They have been tested in past slowdowns, and experienced managers can pick and choose from a long list of techniques.
Some public companies are willing to endure big restructuring charges as they cut ongoing spending.
Many established companies, such as Applied Materials Inc. and Dell Computer Corp., have been through downturns before. They're taking more traditional routes to cutting costs, although some bystanders do get caught in the crossfire. Mary Grayson Thibaut, a graduate business student at Dartmouth College, was hit this spring when Dell Computer called her and told her to forget about a summer internship the company had previously offered her. Dell offered a settlement payment to many of its new interns and recent college graduates to which it had made job offers. It paid them not to show up.