7 out of 10 CFOs of Major Global Companies Express "Concerns Over Worldwide Economic Recession"

70% of Respondents Predict Unpaid Leave and Layoffs Next Month

[Asia Economy Reporter Minji Lee] A survey revealed that 7 out of 10 chief financial officers (CFOs) from major companies in 36 countries worldwide are concerned about a global economic recession.

[Image source=Yonhap News]

According to global consulting firm PricewaterhouseCoopers (PwC) on the 15th, a survey conducted around the 6th of this month of 824 CFOs from companies around the world showed that 71% (multiple responses allowed) cited the possibility of a global economic recession as the biggest concern related to the novel coronavirus disease (COVID-19).

Following that, high response rates were recorded for 'financial shocks' (70%) related to performance, liquidity, and capital costs, 'demand decline due to worsening consumer sentiment' (39%), and 'supply chain issues' (31%).

Among all respondents, 73% evaluated that the spread of COVID-19 could cause significant damage to their corporate activities. Of these, 80% expected a decrease in sales.

Only 16% responded that COVID-19 would have a limited impact on specific business sectors, and about 10% answered that there would be little impact.

In this survey, most respondents agreed that cost reduction and securing cash are priorities. Financial measures being considered in relation to COVID-19 (multiple responses allowed) were 'cost containment' (77%), 'postponement or cancellation of investments' (65%), and 'modification of financing plans' (48%), in that order.

Nearly 70% of CFOs expected to implement unpaid leave (42%) or layoffs (28%) next month.

Some also showed a tendency to view COVID-19 as an opportunity to seek mergers and acquisitions (M&A) of other companies at relatively low prices. Among respondents, 13% said the incentive to pursue M&A has increased. Thirty percent said their existing M&A strategy remains unchanged, and 57% said they are taking a wait-and-see approach.

Additionally, 42% of respondents said they would pursue supply chain diversification after this situation ends, and 45% expressed willingness to receive government financial support to overcome the crisis.

Regarding the time required to normalize corporate activities after the end of the COVID-19 crisis, about 56% of respondents said less than three months. Those expecting 3 to 6 months and 6 to 12 months were 23% and 16%, respectively, while only 6% anticipated it would take more than a year.

However, PwC pointed out that CFOs viewed the situation optimistically based on the survey results. A company official emphasized, "Some countries and companies may stabilize soon, but full recovery will take time."

This survey was conducted in the United States, Japan, Germany, France, Switzerland, Portugal, Sweden, the Netherlands, Greece, Ireland, Denmark, Mexico, Brazil, Colombia, Singapore, Thailand, the Philippines, and 10 Middle Eastern countries, excluding Korean companies.

This content was produced with the assistance of AI translation services.