Executive Briefings

Despite Their Growth, Many Companies Cutting Costs Like They Were in Trouble

A large number of U.S. companies that are experiencing growth are also making moves to cut costs that are more typical of businesses in distress, according to a new Deloitte survey.

Despite Their Growth, Many Companies Cutting Costs Like They Were in Trouble

The poll of 210 senior executives at Fortune 1000 companies found that 88 percent percent of respondents expect to pursue cost reductions over the next 24 months, regardless of company performance, a more than 10 percent increase from the last report.

Respondents cited the global economy as their top concern, from lower international consumer demand to foreign exchange volatility.

“The ‘save to grow’ strategy that emerged in our previous survey (using cost reduction to fund growth initiatives) remains prominent,” Deloitte said.

But the consulting firm also said that strategy is being “accompanied by actions not seen since the 2008 global recession, including focusing on balance sheet issues such as working capital, treasury, credit and cash flow. These cost actions are more typically seen in ‘distressed’ companies and are not traditionally associated with a ‘save to grow’ mentality.”

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The poll of 210 senior executives at Fortune 1000 companies found that 88 percent percent of respondents expect to pursue cost reductions over the next 24 months, regardless of company performance, a more than 10 percent increase from the last report.

Respondents cited the global economy as their top concern, from lower international consumer demand to foreign exchange volatility.

“The ‘save to grow’ strategy that emerged in our previous survey (using cost reduction to fund growth initiatives) remains prominent,” Deloitte said.

But the consulting firm also said that strategy is being “accompanied by actions not seen since the 2008 global recession, including focusing on balance sheet issues such as working capital, treasury, credit and cash flow. These cost actions are more typically seen in ‘distressed’ companies and are not traditionally associated with a ‘save to grow’ mentality.”

Read Full Article

Despite Their Growth, Many Companies Cutting Costs Like They Were in Trouble