Executive Briefings

Execs Still Want to Cut Costs, But Most No Longer Considering Layoffs

More than half of Fortune 1000 executives are focused on cost reduction strategies for delivering earnings and funding growth in 2012, according to a recent survey commissioned by Procurian, formerly ICG Commerce, and conducted by Harris Interactive. Administered to more than 300 Fortune 1000 executives, the survey finds that in the coming year 60 percent of respondents will focus on non-people-related cost reductions as the major source of funds for investments in innovation and growth.

Key Findings of the Survey Include

• 52 percent of executives polled list cost reduction either as their top strategy, or within their top three strategies for delivering earnings and funding growth in 2012

• 60 percent say they will focus on non-people-related cost reductions, as opposed to 30 percent that will turn to layoffs or downsizing

• Half of Fortune 1000 executives say reducing indirect and non-product input costs could provide significant savings, without disrupting business

• Fortune 1000 executives cite limited resources, large, disparate organizations and lack of information as reasons why managing indirect spending has been a challenge for them

• More than 70 percent of executives polled say that their purchasing group does not play a highly strategic role, with global impact, in managing indirect and non-product expenses

"With the slow growth that we've seen globally, it's no surprise that companies remain focused on managing costs in 2012," said Carl Guarino, CEO of Procurian. "What's unique about this data is that the majority of companies are focusing on their indirect costs, which is an area of spending that has been largely undermanaged in the past. As companies have exhausted other cost reductions such as layoffs or downsizing, they've started to look elsewhere for savings that can be used to improve margins or fund product innovation and growth and have identified indirect spending as a significant source of savings."

Source: Procurian

 

Key Findings of the Survey Include

• 52 percent of executives polled list cost reduction either as their top strategy, or within their top three strategies for delivering earnings and funding growth in 2012

• 60 percent say they will focus on non-people-related cost reductions, as opposed to 30 percent that will turn to layoffs or downsizing

• Half of Fortune 1000 executives say reducing indirect and non-product input costs could provide significant savings, without disrupting business

• Fortune 1000 executives cite limited resources, large, disparate organizations and lack of information as reasons why managing indirect spending has been a challenge for them

• More than 70 percent of executives polled say that their purchasing group does not play a highly strategic role, with global impact, in managing indirect and non-product expenses

"With the slow growth that we've seen globally, it's no surprise that companies remain focused on managing costs in 2012," said Carl Guarino, CEO of Procurian. "What's unique about this data is that the majority of companies are focusing on their indirect costs, which is an area of spending that has been largely undermanaged in the past. As companies have exhausted other cost reductions such as layoffs or downsizing, they've started to look elsewhere for savings that can be used to improve margins or fund product innovation and growth and have identified indirect spending as a significant source of savings."

Source: Procurian