- As the impacts of the coronavirus pandemic are felt, 64% of companies are implementing cost containment measures, according to a PwC survey released Monday. The second CFO survey about the public health crisis conducted by PwC this month polled 55 finance leaders across industries in the U.S. and Mexico. The survey took place during the week of March 25.
- The number of companies deferring or canceling planned investments has doubled, from 32% to 64% between the first and second survey, PwC found. The finance leaders were most likely to rethink investments in facilities and IT.
- Six in 10 finance leaders expect their companies to struggle with productivity loss from a lack of remote work capabilities, according to the survey. While part of the concern is technical, such as broadband access, family well-being can also impact productivity.
The coronavirus pandemic is pressure testing business resilience. Managing liquidity, cash and anticipating how the pandemic will impact moving forward is key, according to Tim Ryan, chair and senior partner at PwC, speaking on a conference call Monday.
Impact varies depending on industry. Companies in consumer packaged goods are experiencing business change and demand increase. Others sectors — including retail, travel, leisure and automotive — have seen demand drop off.
Many companies have made people-first promises and said they would only use layoffs as a last resort, Ryan said. While 44% of leaders expect furloughs and 16% anticipate layoffs, most companies are trying to avoid such measures.
With an eye toward cost containment, companies are starting to put actions in place that are more medium- rather than short-term, according to Amity Millhiser, chief clients officer, speaking during the conference call.
Two weeks ago, companies were in the early stages of mobilizing response, Millhiser said. Now they've had more time to run longer-term scenarios and are evaluating how they can reduce cost, preserve cash and maintain liquidity. A quick way is reducing facilities costs, particularly as the workforce is home bound.
IT is trickier to cut, because companies have long-standing IT projects they are working on, she said. Certain technologies will also make it easier to work from home.
Many companies were already investing in IT and remote work prior to the outbreak. What's happened is an acceleration of adoption. And investments around critical infrastructure will continue.
With collaboration and remote work tool investments, the recent weeks are akin to jumping in the deep end of a pool; efforts are getting tested, Ryan said. Investments around transformation won't simply stop — some are on pause, Ryan said. But companies will rewrite transformation and IT priorities once the health crisis subsides.