“Layoffs don't seem to be the first choice for a lot of companies," said Kevin Oakes, CEO of i4cp, which recently conducted a survey of 265 companies about cost-cutting this year. "In this uncertain economic environment, it's clear companies are intent on not being caught flat-footed," Oakes said, "but so far it's looking more like careful surgery than a bloodbath.
According to the study, 88% of companies surveyed plan to implement cost-cutting measures within a year. Most of them are considering improving efficiency. Seventy-one percent said they are considering cutting discretionary spending, and 65% are considering seeking lower costs from vendors. By contrast, just 33% said their organizations are planning to reduce head count to the same degree.
The most likely cutback targets are operations, with 49% of companies reporting they are looking at reducing costs in this area. That's closely followed by administration, at 48%, and the use of external vendors/outsourced partners, at 43%. More than a third (35%) said they'd look to HR as a place for reducing costs. The least likely areas for cost-cutting measures are research and development, with just 19% of respondents saying their firms are - to a moderate, high or very high extent - planning to reduce costs in this area.
