Layoffs will be a last resort for many businesses amid the coronavirus pandemic, according to CFOs recently surveyed by PwC in the U.S. and Mexico.
Just 16% said they are considering layoffs, while 60% are considering cost containment measures involving mid- and long-term investments, according to the survey.
The results come after a record 3.28 million unemployment claims reported last week, and a historic $2.2 trillion economic stimulus package was passed by Congress and signed by President Donald Trump.
The survey of 55 CFOs, mostly from Fortune 1000 companies, shows how dramatically the potential impact form the outbreak has changed from two weeks prior, when PwC first conducted the survey.
“Many companies are grappling with how to maintain financial and operational stability while navigating this crisis, and CFO confidence in their business' ability to recover within months continues to wane," said Amity Millhiser, PwC chief clients officer. "Solvency remains top of mind in the face of a potential economic downturn, and we can expect to see further major financial actions aimed at maintaining business resiliency in the coming weeks.”
On a conference call Monday, Millhiser said that it appears many companies are now getting a sense of the impact of the outbreak on business.
At least 64% are looking at deferring or canceling investments compared to just 32% two weeks ago, she said.
Tim Ryan, PwC U.S. chair and senior partner, said the reluctance to lay off is a significant takeaway, as businesses are faced with the reality of the 2020 outlook.
"Business leaders understand that pre-crisis targets are no longer relevant, and their number-one priority is now to lead their organization and people through the COVID-19 pandemic and its wide-reaching ramifications," he said.
Another report similarly reflects a reluctance to lay off. Only 7% of companies have laid off employees, typically hourly wage earners, however, 37% will or may do so in the future, according to the latest survey from Willis Towers Watson (WLTW).
Willis Towers Watson surveyed 812 companies, of which 63% were multinational, which employ a total of 9.3 million people.
Many of the companies have employed alternative or work-from-home arrangements, while 8% are paying premiums — typically 10% above baseline compensation— for mission-critical employees, according to the survey.
“Companies’ highest priorities remain the physical and financial well being of their employees,” said Adrienne Altman, managing director and North America head of rewards at Willis.
“However, amid heightened concern over the impact the virus will have on their operations, companies have started to implement some of the same cost control measures we saw during the last recession.”