More CFOs Say They Anticipate Layoffs, According to PwC COVID-19 CFO Pulse Survey
Over a quarter of CFOs say they expect to lay off employees as they deal with financial impact of pandemic
Apr 13, 2020, 12:00 ET
NEW YORK, April 13, 2020 /PRNewswire/ -- The third release of PwC's COVID-19 CFO Pulse Survey reveals 26% of US chief financial officers (CFOs) anticipate layoffs, a marked increase from two weeks ago, when PwC surveyed US and Mexico CFOs and found that only 16% of them were expecting layoffs.
As the crisis stretches farther into 2020, financial impacts of COVID-19 now rate as the top concern, with 75% of CFOs citing the pandemic's effects on operations and liquidity. In fact, 82% of CFOs are now focused on reining in costs — up considerably from two weeks ago, as they continue to deal with the economic impact of the COVID-19 pandemic. Two thirds (67%) of survey respondents are considering deferring or canceling planned investments. Most companies are looking to contain costs by halting investments in facilities and capital expenditures, IT, workforce and other areas.
"As we see the economic ramifications of the pandemic continue, workforce discussions are shifting," said Tim Ryan, US Chair and Senior Partner, PwC. "Many of the business leaders I am speaking to want to do everything they can to protect their workers' jobs. However, we are seeing that without normal revenue flows, many leaders are being forced to make tough decisions around staffing and costs. Unfortunately, it is becoming increasingly difficult for some to avoid reducing headcount given the continued uncertainty around how long the pandemic will last."
The prospect of mounting layoffs is reflected by a vast majority (81%) of those surveyed who expect COVID-19 to decrease their company's revenue and/or profits this year. Furthermore, fewer financial leaders (61%) feel they could return to "business as usual" within three months if COVID-19 were to end immediately, a considerable drop from two weeks ago.
PwC's survey of financial leaders also found the pandemic's impact on workforce investments varies by sector. Only 13% of Financial Services business leaders expect layoffs, while more Industrial Products (36%) and Consumer Markets (30%) CFOs say they expect layoffs.
"Companies are cutting costs and putting planned investments in technology, workforce and capital expenditures on hold while they try to weather an unprecedented economic storm." said PwC Chief Clients Officer, Amity Millhiser. "Before this pandemic hit, many businesses were focused on long-term growth. Now they are being forced to think short-term and protect liquidity."
About the survey
PwC surveyed 313 US CFOs and finance leaders between April 6-8, 2020. 84% of the respondents were from public and private companies in these top four sectors: financial services (27%), technology, media and telecommunications (19%), industrial products (22%) and consumer markets (15%). 54 respondents are from Fortune 1000 companies. The PwC COVID-19 CFO Pulse Survey is taking place biweekly to track changing sentiment and priorities. The first iteration of the Pulse Survey was conducted March 9-11, 2020 and the second took place from March 25-27, 2020. You can view all findings and insights by visiting pwc.com/us/covid-19-survey.
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