The Collaborative International Dictionary of English v.0.48:

Retrenchment \Re*trench"ment\, n. [Cf. F. retrenchment.]
   1. The act or process of retrenching; as, the retrenchment of
      words in a writing.
      [1913 Webster]

            The retrenchment of my expenses will convince you
            that ? mean to replace your fortune as far as I can.
                                                  --Walpole.
      [1913 Webster]

   2. (Fort.) A work constructed within another, to prolong the
      defense of the position when the enemy has gained
      possession of the outer work; or to protect the defenders
      till they can retreat or obtain terms for a capitulation.
      [1913 Webster]

   Syn: Lessening; curtailment; diminution; reduction;
        abridgment.
        [1913 Webster]

WordNet (r) 3.0 (2006):

retrenchment
    n 1: entrenchment consisting of an additional interior
         fortification to prolong the defense
    2: the reduction of expenditures in order to become financially
       stable [syn: retrenchment, curtailment, downsizing]