Researchers at the firm said the financial impacts of COVID-19 “now rate as the top concern” among cfo’s. Seventy-five percent of respondents cited the “pandemic’s effects on operations and liquidity.”
“In fact, 82 percent of cfo’s are now focused on reining in costs — up considerably from two weeks ago, as they continue to deal with the economic impact of the COVID-19 pandemic,” PwC said in a statement. “Two thirds (67 percent) of survey respondents are considering deferring or canceling planned investments. Most companies are looking to contain costs by halting investments in facilities and capital expenditures, IT, workforce and other areas.”
The PwC survey follows other reports in the U.S. and abroad citing the negative impact of COVID-19 on businesses as well as on consumers. Aside from halting investments and sending people to the unemployment line, the pandemic is also impacting local municipalities who rely on sales tax revenue to fund operations and maintain services.
With businesses, maintaining revenue flow is needed to keep headcounts. Tim Ryan, U.S. chair and senior partner at PwC, said as the “economic ramifications of the pandemic continue, workforce discussions are shifting.”
“Many of the business leaders I am speaking to want to do everything they can to protect their workers’ jobs,” Ryan said. “However, we are seeing that without normal revenue flows, many leaders are being forced to make tough decisions around staffing and costs. Unfortunately, it is becoming increasingly difficult for some to avoid reducing headcount given the continued uncertainty around how long the pandemic will last.”
The PwC survey found that 81 percent of those polled expect the pandemic to drain their company’s profits and/or sales this year. “Furthermore, fewer financial leaders (61 percent) feel they could return to ‘business as usual’ within three months if COVID-19 were to end immediately, a considerable drop from two weeks ago,” PwC said in their report.
Amity Millhiser, PwC chief clients officer, said companies are “cutting costs and putting planned investments in technology, workforce and capital expenditures on hold while they try to weather an unprecedented economic storm.”
Millhiser said before the COVID-19 pandemic hit, “many businesses were focused on long-term growth. Now they are being forced to think short-term and protect their bottom lines.”