A new survey by Chief Executive finds the impact of Covid-19 has quickly spread through American businesses, with 68 percent of the CEOs we polled experiencing declines in revenues due to COVID so far this year, and 84 percent expecting further declines in April.
In the poll of 254 U.S.-based CEOs, fielded April 1-3, 16 percent said they’d experienced declines of more than 30 percent. Only 32 percent said they’d yet to experience any impact on revenues, or were still growing, despite the crisis.
Earlier this week, Chief Executive released it’s April survey of CEO confidence, fielded At the same time. it found CEO confidence in the current business environment fell by 34 percent since March, yet found optimism for a rebound remained high.
CEOs we polled say they can sustain the downturn for several months, with 14 percent saying they can sustain the downturn for just another three months, 51 percent saying they can weather the current economic climate for 3 months to a year, and 34 percent saying they can hold out for more than a year.
Overall, many CEOs have made immediate and dramatic cuts to direct employee costs, through a mix of strategies: 29 percent have furloughed employees, 29 percent have reduced senior executive salaries, and 25 percent have laid off workers—among other actions taken. The magnitude of the furloughs also varies (See chart, below).
Actions by Industry
Most of the layoffs and furloughs have taken place within the travel/leisure and entertainment industries, as might be expected. More surprising, half of healthcare (providers and payers) CEOs polled said they’ve had to furlough employees already, and 83 percent said they are considering layoffs in the weeks ahead.
In the retail sector, 70 percent of CEOs said they have had to furlough workers, and 44 percent have also had to let employees go. More than half are now considering taking further actions in April, although they remain uncertain about the extent of those cuts.
Across the board, the most popular actions taken in reaction to the crisis so far have been halting all company business travel (86 percent), implementing new health and safety protocols (83 percent) and implementing remote work for all employees (60 percent).
Our survey shows that 38 percent have applied for an emergency loan and/or requested capital from investors, while 22 percent have drawn down a preexisting bank credit line. Other moves include cancelling or postponing projects, slowing payables and reducing inventories.
The survey also shows that in sectors where remote work isn’t always possible (e.g., retail trade, where only a third of companies say they’ve implemented remote work for all employees compared to 90 percent of financial services firms, for instance), CEOs have been more inclined to apply for loans or request capital. In fact, 67 percent of retail trade CEOs surveyed say they’ve applied for an emergency loan, and 25 percent have requested capital from investors. In contrast, only 11 percent of financial services companies have applied for a loan and none have reported requesting capital.
About the CEO Confidence Index
The CEO Confidence Index is America’s largest monthly survey of chief executives. Each month, Chief Executive surveys CEOs across America, at organizations of all types and sizes, to compile our CEO Confidence Index data. The Index tracks confidence in current and future business environments, based on CEOs’ observations of various economic and business components.