46% CEOs Will Fire Employees To Cut Costs; 39% CEOs Stop Hiring New Employees [Survey Results]

As per the KPMG 2022 CEO Outlook released on Tuesday, 39% of global chief executive officers implementing a hiring freeze, and 46% considering downsizing their workforce over the next six months. The great resignation is cooling down.

More than 1,300 CEOs at the world’s largest businesses were surveyed regarding their strategies and outlook. These leaders were from 11 key markets: India, China, US, UK, France, Germany, Italy, Japan, Canada, Australia and Spain.

KPMG 2022 CEO Outlook Survey’s Findings

The silver lining lies in the fact that the three-year view is optimistic as only 9% expecting a further reduced headcount as well as the leaders expect the recession to be mild and short.

A substantial number (14%) of senior executives identify a recession among the most pressing concerns today — up slightly from early 2022 (9%), while pandemic fatigue tops the list (15%).

More than eight out of 10 (86%) global CEOs anticipate that next year the recession will hit. 71% of the CEOs said that the recession would in turn impact 10% of company earnings.

A strong majority of senior executives believe a recession will disrupt anticipated growth (73%). However, three-quarters have already taken precautionary steps.

However, despite these concerns, 500 CEOs surveyed by KPMG for its CEO Outlook Pulse survey say that they also feel markedly more confident about the resilience of the economy over the next six months (73%) than they did in February (60%). 

Speaking about the global economy’s growth prospects over the next three years, 71% of leaders are confident about the growth. The number was 60% in early 2022.

Nine in 10 (85%) are confident about their organisation’s growth over the next three years.

Though the uncertainty is driving CEOs to continue to prioritise digital transformation, however, 40% have paused their strategies for the same and another 37% plan to take such steps in the next six months.

Over the next three years, more than a quarter believe that advancing digitalisation and business connectivity is vital to achieving growth objectives.

Moreover, 74% agree that their organisation’s digital and environmental, social and governance (ESG) strategic investments are inextricably linked.

Top Risks as per CEOs

In addition to emerging and disruptive technology, reputation, regulatory and operational issues, and climate change are amongst other areas as top risks to growth as per the identification of CEOs. 

As compared to 3% in February, 10% think of reputational risk such as a misalignment with customer or public sentiment — as a major concern.

Coming to the geopolitical scene, 51% of the organisations have discontinued working with Russia and 34% plan to do so over the next six months.

As per the report, CEOs are also putting a number of ESG goals on hold as they try to prepare their businesses for fallout from a possible recession. 

The report said that “Nearly half (45%) of CEOs agree that progress on ESG improves corporate financial performance, an increase from 37% just a year ago. However, as economic uncertainty continues, half are pausing or reconsidering their existing or planned ESG efforts in the next six months, and 34% have already done so”.

In fact, 69% of senior executives noted greater demand from stakeholders for increased reporting and transparency on ESG, up from 58% in 2021, the report showed.