More Layoffs Soon? 66% CEOs In India Expect Recession To Hit Within Next 1 Year, Says KPMG Study

With both IMF and World Bank already warning about a global recession hitting us soon, recession fears across the world are deepening day by day. While a Bloomberg survey of economists that was revealed in July 2022 mentioned that India has ¡®zero probability¡¯ of slipping into recession next year, it seems that many CEOs in the country don't think so.

66% of chief executive officers (CEOs) in India believe there will be a recession in the next 12 months and are expecting a short-term decline in the growth prospects of companies and the country, according to KPMG 2022 India CEO Outlook.

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The top concerns faced by CEOs in India today are pandemic fatigue, economic factors like the threat of rising interest rates, inflation, anticipated recession and reputational risk, said the study, which asked more than 125 CEOs in India about their strategies and outlook.

Over the next year, 66% CEOs in India compared to 86% globally anticipate a recession, as per TOI. Also, around 86% CEOs in India, compared to 71% CEOs globally, are predicting it will impact company earnings by up to 10%.

The study found out that senior executives in India as well as globally also feel significantly more confident about the resilience of the global economy over the next six months (82% CEOs in India compared to 73% CEOs globally) than they did earlier in February 2022 (40% CEOs in India compared 60% CEOs globally).

Also Read: JPMorgan Chase CEO Warns Of Recession In 2023

Hiring Freeze & Layoffs

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The report mentioned that with continued economic turmoil, there are signs the "great resignation" could be cooling down, with 33 % CEOs in India compared to 39% of CEOs globally having already implemented a hiring freeze, and 47% CEOs in India compared to 46% CEOs globally considering downsizing (layoff) their workforce over the next six months.

But when CEOs take a longer-term view, 79% CEOs in India and globally expect their organisation¡¯s headcount to increase over the next three years, as per the study.

Also, geopolitical uncertainties will continue to impact strategies and supply chains over the next three years, according to CEOs in India. At least 75% of CEOs in India, compared to 81% of CEOs globally, have adjusted or plan to adjust their risk management procedures considering geopolitical risk, and 21% of CEOs in India compared to 20% of CEOs globally will be increasing measures to adapt to geopolitical issues to achieve their growth objectives, the survey shows.

Disruptive Tech Emerges As Number 1 Risk

The survey mentioned that disruptive technology has emerged as the number one risk to organizational growth. 72% CEOs in India compared to 56% CEOs globally are placing more capital investment in buying new technology.

Even the cyber environment is evolving quickly, with 66% CEOs in India compared to 77% CEOs globally seeing information security as a strategic function and a potential source of competitive advantage, as per the survey.

Also Read: IMF Says India Doing Better Than Most Other Countries

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