Thursday, September 29, 2022

50% of companies plan job losses during economic downturn: report

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At least half of companies worldwide are planning to lay off people, most are cutting their bonuses and withdrawing job offers during the economic downturn, a new report warns.

According to the latest PwC Pulse: Managed Business Risks in 2022 US survey, 50 percent of respondents are reducing their overall workforce, even as business leaders remain concerned about hiring and retaining talent.

“At the same time, respondents are also taking proactive steps to streamline the workforce and create the right mix of employee skills for the future,” the report said Thursday.

This comes as no surprise, after a frenzy of hiring and a tight labor market in recent years, as “executives see the distinction between having people and having people with the right skills”.

“For example, 50 percent of all respondents are reducing their total workforce, 46 percent are cutting or lowering signing bonuses, and 44 percent are withdrawing offers,” the report said.

As of July, more than 32,000 tech workers have been laid off in the US, including at big tech companies such as Microsoft and Meta (formerly Facebook), and the worst is not over for the tech sector that has seen massive stock sell-offs.

In India, more than 25,000 start-up workers have lost their jobs since the start of the pandemic – and more than 12,000 have been laid off this year.

The PwC report noted that these precautions are more prevalent in certain sectors.

“For example, consumer markets and technology, media and telecommunications companies are more likely to invest in automation to address labor shortages,” according to the PwC report.

At the same time, healthcare sees greater talent challenges than other sectors and is more focused on rehiring employees who have recently left.

The global consultancy last month surveyed more than 700 U.S. executives and board members from a variety of industries.

With increasing economic uncertainty, 83 percent of executives are focusing their business strategy on growth.

That uncertainty has become the norm, with business leaders cautiously optimistic about their ability to cope with future economic, social and geopolitical uncertainty.

“In general, this generation of business leaders has minimal experience navigating a recession, but with the possibility of one looming amid mounting geopolitical divisions and skyrocketing inflation, they are optimistic about their ability to cope with what might come next. can come,” said Kathryn Kaminskyshame chairco-leader in trust solutions, PwC US.

“Looking ahead, executives will need to continue to adjust their business strategy and investments to mitigate risk and capture growth opportunities,” added Kaminsky.

Nearly two-thirds of companies (63 percent) have changed or plan to change processes to address labor shortages, up from 56 percent in January 2022.

“Ironically, as companies turn even more towards automation, it is critical to find employees with the right combination of deep functional knowledge and technological know-how. Without the right talent, automations cannot deliver the promised efficiencies and increase operational risk” , the report noted.


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