Reduce drill (cut by hour) (6)
I believe the answer is:
shrink
'reduce' is the definition.
(I know that reduce can be written as shrink)
'drill cut by hour' is the wordplay.
'drill' becomes 'sink' (sink can mean to drill or bore down into earth).
'cut by' is an insertion indicator (some letters cut into others).
'hour' becomes 'hr' (abbreviation).
'sink' placed around 'hr' is 'SHRINK'.
(Other definitions for shrink that I've seen before include "Get less" , "decline" , "Grow smaller like slang psychiatrist" , "Draw back from the psychiatrist?" , "Diminish" .)