The staggering number of layoffs in response to the coronavirus crisis will likely continue, according to a survey released by consulting giant PWC on Monday that found nearly one-third of chief financial officers expect layoffs at their companies in the next month.
“Companies are increasingly saying that one of the ways they will need to cut costs is to lay off people,” PWC Vice Chairman and Chief Clients Officer Amity Millhiser told Yahoo Finance’s “The Final Round” on Friday.
“In my conversation with clients, as difficult as those conversations have been, more and more CFOs are getting to the point where they believe that they will have to lay off people,” she adds.
Massive layoffs have already helped put over 26 million Americans out of work since the coronavirus shut down major portions of the U.S. economy last month. Additional economic damage may be on the way, Trump Administration Economic Advisor Kevin Hassett told CNN on Tuesday, predicting the unemployment rate could reach up to 20% by June.
The PWC survey, which gauges sentiment among 305 finance leaders at U.S. companies every two weeks, has recorded a sharp upswing in the share of CFOs who plan to hand out pink slips over the next month. Four weeks ago, the survey found 16% of finance leaders expected layoffs; two weeks ago, the number had leaped to 26%, Millhiser said. On Monday, the survey found 32% of CFOs planned job cuts.
Disruption has been ‘accelerated’
The eventual recovery may bring many of those jobs back as shuttered sectors of the economy like dine-out and live entertainment return to operation. But the rise of remote work during the pandemic will permanently alter the way many businesses operate, Millhiser said.
“It has forever changed not only for the next generation, who in many cases will feel more comfortable with some of this technology, but frankly for all of us,” she says.
“With a lot of the companies we talk to, they have been investing in digitally transforming themselves over many, many years,” Millhiser adds. “This crisis has given them the opportunity to grow into and test their virtual working capabilities and not just with their workforce, but actually also with interacting with customers.”
Millhiser spoke to Yahoo Finance’s “Final Round” as part of a special segment that previews the “All Markets Summit,” a business and financial conference that will take place in New York City on Oct. 26. The conference will take up the issue of “Generational Opportunities” — how leaders are building and refining new relationships in a time of profound generational, cultural, and economic change.
The coronavirus outbreak has rapidly advanced the adoption of new business practices across the economy, Millhiser said.
“One of the things that's happened as a result of the COVID crisis has been that a lot of the disruption that we were seeing over the past few years has been accelerated,” she said, “and this is across industries and sectors.”