Recessions impact different sectors of the economy differently, with some industries hit early and others later. Consumer-facing sectors, including media, usually feel the impact immediately. Technology (and telecom, to a lesser extent) is generally regarded as somewhat recession-resistant since customers continue to invest in ways to save costs and operate more efficiently.
Still, no company can be complacent. To get through a downturn and emerge stronger during the recovery, TMT companies need to take steps that go beyond short-term cost-cutting. They can start by learning from past downturns, including these three key lessons for longer-term growth:
- Fine-tune commercial/revenue strategy: This is the time to double down on the best customers and make sure you are not losing any sales because of an outdated commercial strategy
- Hold on to talent: Companies that outperform during downturns recognize, reward, and retain talent, and use financial and non-financial incentives
- Use M&A for offense and defense: A downturn is a good time to prune the portfolio—and to pick up assets that can deliver new sources of growth
In this report, we present the current outlook from KPMG economists, responses from TMT leaders to an economic survey we conducted in the second quarter, and detailed insights from KPMG advisors who specialize in TMT. Their consensus: thoughtful tactical moves now can blunt the impact of slowing sales and take advantage of new growth opportunities.