A June 2022 Gartner survey of executives suggests which areas of businesses will experience cost cutting measures first.
According to the findings, mergers and acquisitions, as well as sustainability, are the first business areas on the chopping block as the economy enters a recession and companies seek to mitigate their costs.
“Cuts to M&A are an obvious choice after record activity in 2021 and with rising interest rates significantly increasing the cost of financing such deals,” said Randeep Rathindran, vice president of research at Gartner Finance.
“It’s more surprising to see sustainability so close to the chopping block because CEOs rated it as a top strategic priority for the first time in 2022, and ESG disclosures are increasingly becoming enshrined in legislation.”
Despite many firms conducting hiring freezes and layoffs, 46% of CEOs and CFOs said that workforce spending and talent development would be the last area to see cuts.
Similarly, 45% said that they would cut digital investments last, particularly as businesses become more reliant on these technologies to cut costs and improve efficiency.