KPMG said that its survey of 110 tech CEOs and 75 telco CEOs found that 85% see a recession as likely and most of them are asking themselves how to prepare for it.
KPMG’s 2022 CEO Outlook Survey identified key challenges and opportunities that tech, media, and telco CEOs face.
The report said most of the CEOs are asking themselves how to prepare for the impending recession. Seventy-four percent of tech CEOs and 77% of telco CEOs agreed that a recession would cause
further disruption to their business, making it even more difficult to rebound from the
As a result, half of tech CEOs and 33% of telco CEOs are considering downsizing their employee base to plan for an anticipated recession.
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For the companies considering their options and making tough decisions, KPMG said it would encourage
them to look no further than to the Great Resignation. Its acute impact on the tech sector further proved that talent is an organization’s greatest asset and making short-term decisions to let talent go can have negative long-term consequences.
Cybersecurity remains critical
Seventy-five percent of tech CEOs and 73% of telecommunications CEOs agree geopolitical uncertainty is raising concerns of a cyber-attack in their organizations. In this new normal of heightened cyber vigilance, cybersecurity can no longer exclusively be an IT issue. It must be a strategic priority embedded throughout an organization’s culture, technology, and operations.
Seventy-seven percent of tech CEOs, and 80% of telco CEOs said they’re seeing significant demand from stakeholders such as investors, regulators and customers for increased reporting and transparency on environmental, social and governance (ESG) issues.
Further, over half (55%) of both tech and telco CEOs agreed that ESG programs improve their overall financial performance.
However, even with strong stakeholder pressure and over half of the CEOs connecting ESG with improved financial performance, if faced with a potential recession over the next six months, 47% of Tech CEOs and 51% of Telco CEOs indicated they’d pause or reconsider their existing or planned ESG efforts.
As other leaders look to cut spending on ESG, now is the time to take a long-term approach and double down on ESG efforts, KPMG said. The CEOs that keep their foot on the gas stand not only improve financial performance, but gain greater trust with their talent, investors, customers, and other stakeholders.
M&A appetites remain strong
It’s clear that both skyrocketing inflation and recession fears forced 2022 M&A outlooks back down to earth, after both the media and telecom sectors experienced a banner year for M&A last year.
In recent quarters, KPMG has seen a decline in M&A activity as noted its most recent M&A report. However, despite the headwinds facing CEOs, tech respondents remain bullish with more than half (54%) expressing a strong appetite for M&A. Actual deals however may depend on the macroeconomic environment, with M&A becoming far more challenging in contractionary periods.
The future of work
The future of work also appears slightly unclear. Fifty-two percent of tech CEOs and 56% of telco CEOs agree that hybrid work has had a positive impact on collaboration and innovation.
However, about half of the tech CEOs surveyed now view the future of work as more of a hybrid model. Meanwhile, more than half (53%) of the telecommunications CEOs surveyed think their employees will be fully in the office over the next three years.
Fears of recession, cyber risk, increasing stakeholder pressure, a redefined workplace – it’s clear technology, media, and telecommunications CEOs are performing a delicate balancing act of managing short-term risks without sacrificing long-term growth, KPMG said.
However, whether through M&A, strategic partnerships, or other avenues, the companies that make a concerted effort to hold onto their people and that continue to drive value by investing in cyber and ESG
stand to gain the most over the long-term.
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