Despite growing concerns around the business and economic impact of the coronavirus pandemic among finance executives, only 16% of chief financial officers (CFOs) are considering issuing layoffs in the next month, according to a new poll by global consulting network PricewaterhouseCoopers (PwC).
CFOs are instead reassessing their supply-chain structures in light of the crisis, the survey indicates.
Out of 55 polled last week in the U.S. and Mexico, 87% said they have “great concern” for their business, and 80% are expecting COVID-19 to decrease their revenue or profits this year. Eighty-five percent of CFOs have already taken financial action as a result of COVID-19, with most focusing on cost containment measures (67%) and deferring or canceling planned investments (58%).
Other costs under evaluation include facilities, general capital, workforce and information technology.
The crisis has prompted an increased focus on supply chains, especially in retail and manufacturing, said Tim Ryan, PwC’s U.S. chairman and senior partner.
“These businesses were heavily reliant on other parts of the world, and many companies had already started evaluating supply chains, given trade wars and now the virus,” he said. “Those plans are continuing to pick up, and hard goods manufacturing and retail are two of the areas where we're seeing more supply-chain planning analysis and likely changes over the medium term that we weren't even contemplating a year ago.”
CFOs see more than ever the need for diverse sourcing, Ryan said: “I see the focus right now on diversification and a realization that having too many eggs in one basket is a risk.”
Timely, incisive articles delivered directly to your inbox.