CFOs are planning to curtail capital expenditures, anticipate more layoffs and plan to cut IT spending to bolster finances amid the COVID-19 economic fallout, according to PwC's latest survey.
PwC launched its CFO COVID-19 survey two weeks ago to set a benchmark for corporate finances. PwC found that 26% of US CFOs anticipate layoffs, up from 16% two weeks ago.
Meanwhile, 82% of CFOs are focused on cost cutting with 67% of them expecting deferring or cancelling planned investments. Facilities and capital expenditures are the two top areas, but 53% of CFOs say IT spending will be cut, according to PwC. CFO sentiment is being closely tracked as executives gauge what happens when the economy reboots.
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Tim Ryan, Chair and Senior Partner at PwC, said:
We're clearly in a recession at this point. It is hard to find a company not focusing on cutting costs and preserving capital. There is a lot of discussion about what and how they come back to work. Some industries will make permanent shifts. Many industries won't come back the way they were.
Amity Millhiser, Chief Clients Officer, added that "business as usual will look very different this time around."
Here's the breakdown of where companies are looking to cut spending.
According to PwC, 81% of CFOs say COVID-19 will hurt their companies revenue and/or profits this year and 61% feel they could return to business as usual if the virus would end immediately.
CFOs are trying to navigate a customer base that may be changed going forward due to the COVID-19 lockdown. A PwC survey of more than 1,600 adult consumers found that 78% of them were concerned about economic costs with 71% worried about human costs. PwC experts say that consumers are likely to change their buying behaviors even after COVID-19.