50% of companies plan job cuts in economic downturn: Report | Company News

New Delhi: At least half of companies globally plan to lay off, most cut bonuses and cancel job offers due to economic downturn, a new report has warned.

According to PwC’s ‘Pulse: Managing Business Risk in 2022’ survey in the US, 50% of the latter are concerned about reducing their overall workforce, even as business leaders, on hiring and retention talents.

“At the same time, proactive steps are also being taken to streamline the workforce and establish the right mix of worker skills for the future,” the report released Thursday said.

That’s no surprise, after a hiring spree and tight labor market over the past few years, because “executives see the distinction between having people and having people with the right skills.”

“For example, 50% of all deals reduce their overall headcount, 46% remove or sign bonuses, and 44% are cancelled,” the report reveals.

More than 32,000 tech workers have been laid off in the United States through July, including at big tech companies like Microsoft and Meta (formerly Facebook), and the worst is yet to be over for the technology sector. technology that has seen massive stock sales.

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

The PwC report mentioned that these precautionary measures are more in some industries.

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

At the same time, healthcare faces greater talent challenges than other sectors and is more focused on rehiring recently departed employees.

The global consultancy surveyed more than 700 U.S. executives and board members across industries last month.

With growing economic uncertainty, 83% of executives are focusing their business strategy on growth.

This uncertainty has become the norm, with business leaders feeling cautiously optimistic about their ability to weather future economic, social and geopolitical uncertainties.

“Overall, this generation of business leaders has minimal experience navigating a recession, but with the possibility that it looms amid growing geopolitical divisions and soaring inflation, they are optimistic. as to their ability to handle what may be to come,” said Kathryn Kaminsky, vice president, co-head of trust solutions, PwC US.

“Going forward, executives will need to continue to adjust their business strategy and investments to mitigate risk and capitalize on growth opportunities,” Kaminsky added.

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

“Ironically, as companies increasingly move towards automation, finding employees with the right mix of deep functional knowledge and technological savvy is critical. Without the right talent, automations may fall short of promised efficiency goals and increase operational risk,” the report notes.

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Karen J. Nelson