How CFOs see the workplace changing after COVID-19

PwC Chairman Bob Moritz joins Yahoo Finance’s Alexis Christoforous and Brian Sozzi to break down the COVID-19 CFO Pulse Survey and discuss how the company is navigating the coronavirus crisis.

Video Transcript

BRIAN SOZZI: Now, PricewaterhouseCoopers is out with a survey that reveals what those are focusing on during the coronavirus pandemic. Cost-cutting measures and workplace safety are top of mind as we consider reopening the US economy.

Joining us now to discuss is PwC chairman Bob Moritz. Bob, thanks for taking some time this morning. We appreciate it.

BOB MORITZ: Happy to be here.

BRIAN SOZZI: So I'm digging through your latest COVID-19 CFO Pulse Survey, and one, among many things, that stood out to me is that 1/3 of those CFOs surveyed expect a 25% or greater decline in sales or profits this year, and how do you think CFOs will react to that? Do you think we're getting ready to see some major cost-cutting initiatives across corporate America that I would argue we haven't seen just yet?

BOB MORITZ: Yeah, I think there is. You've got a combination of people seeing the demand reduction as a result of the shutdown, and that demand reduction will go well beyond the shutdown as this phased-in return to work and return to the ecosystem comes into effect.

As a result, we've already seen organizations do three things. One is deal with the people side of the equation, which we'll come back to later. The second is a keen focus on protecting cash-- so a reduction of investments. It's about more than 70% of them saying I'm going to stop capital expenditures and reduce investments. And the third is actually restructuring debt as well and trying to get as much cast as they possibly can as they interact with the banks relevant to the credit facilities to have availability for use during the next few months and maybe even thereafter.

ALEXIS CHRISTOFOROUS: Bob, I want to talk about the road to recovery and what CFOs are saying about what's going to happen to their businesses once we do start to reopen. What are they saying about having to change their workplace and reconfigure worksites to sort of keep that social distancing going even when we reopen?

BOB MORITZ: So there's a couple of different things, Alexis, that people are coming through. Almost half of them have talked about already changing the way we work. So you have CEOs, CFOs, and project teams now thinking about reconfiguring the offices, both in terms of how many people are allowed on a floor-- how much space is there between desks? So the footprint of what a traditional building site would look like is much different than what we've seen in the past.

Second is the issue of testing, sensors, and tracing. To get into a building, you might see more sensors, almost similar to an airport security level security now in terms of taking a temperature check to access a building or a floor.

You may end up seeing additional tracing techniques. We actually just developed an application that corporates can use to trace how many people and who have you been in contact over the last x number of hours within a 10- or 12-foot radius? This way if you do have an uptick where somebody has a resurgence of the virus, you can actually shut down a number of people rather than shut down an entire building or floor.

So organizations will change radically the way we are working as well as how much time and energy. They will put in new policies and procedures to allow people to work remotely. Almost half of the CFOs have said remote working is a new way of life. That's what we're going to build into our going-forward plans. My guess is that stays around for the next couple of years more so than ever before. It's solving lots of challenges we had previously.

Think about it. Workplace flexibility-- not in this crisis mode but using it in the new normal will be an opportunity. Reduction of carbon emission-- again, a [INAUDIBLE] issue before the management of this issue. It'll be an opportunity for us to solve for some of those problems going forward as well.

ALEXIS CHRISTOFOROUS: Bob, do you get the feel that CFOs are prepared for that dreaded possible second wave we keep hearing health officials warning about? If we do reopen economies too soon and we get a second wave of this virus, do they feel confident that their businesses are prepared this time around having lived through the first phase?

BOB MORITZ: So clearly, Alexis, the topic is top of mind with every conversation you have with our health officials, both in terms of a resurgence coming back or perhaps the winter months are going to be upon us very quickly, or perhaps additional mutations that are there embedded, a possibility.

The reality is the survey doesn't get to that issue, but the anecdotal evidence based upon the CFOs, they are thinking about what else do I need to do if I go to that next step? There is a tremendous amount of lessons learned on the health side. That they feel comfortable with. It's really the economic implications of going to that second level that they're more worried about right now.

All the lessons learned on working remotely, getting that resiliency, enhancing their technology, that's been taken care of. It's really the issue of does that recession potential deepen or go to depression-like level if, in fact, we go at another round at the level that we've seen previously?

BRIAN SOZZI: Bob, the last time we saw you I believe was in Davos where the theme was stakeholder capitalism. Now you sit on the influential Business Roundtable. Do you think what we heard back in Davos is still in play right now given the situation that CEOs, CFOs are still focused on transforming the capitalistic system?

BOB MORITZ: Absolutely, and we're seeing it in front of our eyes. The reality is in Davos we were very much focused on the broader ESG-- Environmental, Societal, Good Governance. Today most of that is on the societal or the personal side of the equation or the people side of the equation. So a lot of organizations are very much thinking about the stakeholder aspect, that being their employees, the citizens of the communities they're operating with. There's probably a lessening on the environmental only because this virus has taken over the headline news, but that stakeholder perspective is absolutely front and center.

Every conversation we've had amongst the business community, be it at the BRT level or otherwise, everybody is doing their part to help society at large, not necessarily just their own organization and not necessarily just their own employees. I think you're going to see more of that going forward. I think it's going to put on steroids some of the focus we had on stakeholders and the reporting around that to differentiate good companies from great companies or good companies from bad companies in the eyes of the stakeholders going forward.

BRIAN SOZZI: That is certainly good to hear, especially right now given the situation across the globe. Bob Moritz, PwC chairman, thanks for taking some time today, and please do stay safe.

BOB MORITZ: You too as well, guys. Thanks much.