Over 90% of Indian CEOs find cost-cutting inevitable, but layoffs not among top priorities for 2023 [REPORT]

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The world is currently dealing with issues like unemployment, corporate cyber security, economic slowdown, high inflation, etc. India is no exception. The worries are now being reflected in the responses of global business owners who participated in PwC’s 26th Annual Global CEO Survey 2022. The business leaders seem to be less optimistic about the future than they were in 2021. Their biggest concern is the global economy. A whopping 78% of Indian CEOs, as against 73% of global CEOs, anticipate a decline in global economic growth over the next 12 months.

Interestingly, the views of CEOs about the Indian economy significantly differ. Despite the unfavourable global economic conditions, 57% of Indian CEOs are optimistic about the Indian economy. This was a stark contrast to the optimistic predictions made at the end of 2021 when an astounding 99% of Indian CEOs anticipated economic growth over the following 12 months.

The 26th Annual Global CEO Survey by PwC included 4,410 CEOs from 105 countries, including 68 from India.

The next 10 years will be tough for Indian companies

The report further highlights that about four in ten CEOs, both global (39%) and India (41%), think their business models will not be economically viable in the next ten years if they do not reinvent them.

But what are the major factors that could affect the profitability of the companies in their respective industries over the next decade? Let’s find out!

A whopping 62% of Indian CEOs think that the changing customer demands/preferences in the next 10 years might have a large or colossal impact on the profitability of their businesses. While more than 50% of the CEOs are concerned about regulatory changes and disruptive technologies like AI and blockchain.

Another 49% Indian CEOs believe that supply chain disruptions might impact profitability.

Labour/skill shortages do not seem to be a major concern for Indian companies, given the significant number of job seekers out there in the market. Only 40% of Indian CEOs expressed their concerns about the availability of the labour workforce.

Climate change is another major concern for both global and Indian CEOs, affecting supply chains and cost profiles. The vast majority of businesses around the world have either taken action or are currently taking action to address issues.

About 72% of Indian CEOs, as against 60% of global CEOs, are either implementing or have already implemented initiatives to reduce their company’s emissions. The same percentage of CEOs are either innovating now or have already done so with regard to climate-friendly products and services.

Still, around 31% of Indian CEOs believe their companies will be extremely/highly exposed to climate change.

Another interesting fact the report highlights is inflation as Indian CEOs do not seem worried about it. Only 25% of surveyed CEOs expressed their concern about inflation over the next five years. However, it could pose a threat to their businesses in the next 12 months, as responded by 35% of CEOs in India.

Cost cutting is the top priority for Indian CEOs

Companies are making every effort to combat these challenges over the next 12 months in order to remain competitive and increase customer profits.

Optimising expenses and cost-cutting exercise is the top priority for the CEOs of Indian companies to mitigate economic challenges and volatility. More than 90% of Indian CEOs have reduced their operating costs, or are currently doing, or planning to do within the next 12 months.

Surprisingly, a whopping 59% of CEOs are reducing/have already reduced operating costs. While another 34% consider doing this in the next 12 months.

Diversifying product/service offerings is another top priority for a whopping 90% of Indian CEOs who participated in the survey. About 53% of businesses are already doing this or have already done it, while 37% plan to do it in the upcoming 12 months.

Due to the widespread use of the Internet and other technologies, hackers and other cybercriminals are constantly on the prowl to steal your sensitive information/data. In order to reduce risks, about 50% of Indian CEOs and 48% of global CEOs have increased their investments in cybersecurity and data privacy.

The PWC report revealed a few heartening findings for all employees and job seekers in India. Interestingly, a whopping 85% of Indian CEOs, as against 60% of global CEOs, said that they have no plans to reduce their workforce. Furthermore, 76% of respondents said that they have no plans to freeze the hiring process in their respective organisations.

Another interesting finding in the report was the staggering 96% of CEOs of Indian companies who have no plans to reduce compensation yet, indicating a desire to retain talent at any cost.



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