CFOs Predict More Layoffs, But Economic Boost In Q3

In a survey of senior financial executives, a majority of chief financial officers (CFOs) indicated that they are optimistic that the economy will go back to normal by 2021. Half of all CFOs said they foresee a “V-shaped” recovery to typical economy activity in Q3 2020, while roughly 40 percent foresee a “U-shaped” recovery that lasts into 2021 per a press release from the CFO media brand, which conducted the survey.

Nine percent of respondents, however, foresee a long period of recession with economic activity not picking up until 2022. Almost half — or 49 percent — of finance executives surveyed noted that their organization was “scaling back” or postponing investments, as 47 percent were at work bolstering their liquidity positions. Just 20 percent said they were pausing or closing down select operations.

Thirty-five percent of respondents noted that they were furloughing or laying off staffers. And 36 percent of respondents said they intended to cut 15 percent or less of their workforce. In addition, 17 percent of respondents indicated that layoffs would impact 20 percent or more of their workforce.

CFO Research conducted the survey between March 26 and April 2. It was based on answers from 333 senior finance executives per the press release.

In separate news, the COVID-19 CFO Pulse Survey from PwC indicates that 26 percent of U.S. chief financial officers foresee layoffs compared to when the firm polled U.S. and Mexico CFOs two weeks ago and discovered that just 16 percent of them foresaw layoffs.

The potential for mounting layoffs is shown by eight in 10 — or 81 percent — of those polled who expect COVID-19 to lower their revenue and/or profits of their firm in 2020. The survey also discovered that the effect of the pandemic on workforce investments depends on the industry.

Just 13 percent of business leaders in financial services foresee layoffs, but 30 percent of consumer markets and 36 percent of industrial products CFO indicate they anticipate layoffs.