50% companies planning job cuts amid economic downturn: PwC

At least half of the companies worldwide are planning to cut jobs or prune bonuses and rescinding job offers due to the onset of a global economic downturn, said global financial monitoring firm PwC in its latest report.

In its “PwC ‘Pulse: Managing business risks in 2022” survey in the US, it said 50 per cent of respondents are reducing their overall headcount. “At the same time, respondents are also taking proactive steps to streamline the workforce and establish the appropriate mix of worker skills for the future,” said the report released on Thursday.

This comes as no surprise, after a frenzy of hiring and a tight labour market over the past few years, as “executives see the distinction between having people and having people with the right skills… For example, 50 per cent of all respondents are reducing their overall headcount, 46 per cent are dropping or reducing signing bonuses and 44 per cent are rescinding offers.”

More than 32,000 tech workers have been laid off in the US till July, including at Big Tech companies like Microsoft and Meta, and the worst has not been over yet, said the report.

India job cuts at 25K

In India, more than 25,000 startup workers have lost jobs since the pandemic and more than 12,000 have been fired this year, said the PwC report. “Consumer markets and technology, media and telecommunications companies, for example, are more likely to invest in automation to address labour shortages,” the PwC report mentioned.

At the same time, healthcare is seeing bigger talent challenges than other industries and is more focused on rehiring employees who have recently left.

The global consulting firm last month polled more than 700 US executives and board members across industries. With increasing economic uncertainty, 83 per cent of executives are focusing their business strategy on growth.

“On the whole, this generation of corporate leaders have minimal experience navigating a recession, yet with the possibility of one looming amid increasing geopolitical divides and skyrocketing inflation, they are bullish on their ability to handle what could be ahead,” said Kathryn Kaminsky, vice chair, trust solutions co-leader, PwC US.

Nearly two-thirds of businesses (63 per cent) have changed or are planning to change processes to address labour shortages, up from 56 per cent in January 2022, the report noted.