Senior financial executives are expecting the economy to enter recession in the next 12 months and have begun cutting costs in preparation.

An overwhelming majority (91%) of chief financial officers (CFOs) believe an economic crisis is inevitable, with more than a third (36%) of these predicting a recession this year.

As a result, nearly all (97%) have started implementing, or plan to implement cost-cutting measures, facility spends being a key target for businesses, with two thirds (65%) of CFOs targeting a reduction of more than 10% per year, reveals a new research from flexible workspace operator IWG.

Hybrid working is being viewed as key to achieving saving targets, with 82% CFOs saying it’s a more affordable business model as demand for office space remains high.

Companies have long used office space inefficiently, but the proliferation of hybrid and remote work has them re-evaluating these expenses. In fact, among Fortune 500 CEOs, 74% said they plan to reduce office space, notes the study, conducted among 250 CFOs.

“Hybrid working helps businesses stay competitive and resilient especially in times of economic uncertainty. With the fears of a global recession increasing, research shows that CFOs and business leaders are adopting hybrid working for many reasons. Not only does it support employee work-life balance and wellbeing, it also provides a meaningful boost to a company’s bottom line,” said IWG founder and CEO Mark Dixon.

IWG is seeing strong growth in the Indian market with on-demand membership rising 51% Y-o-Y.

CFOs surveyed confirm this trend, with half (50%) of them saying they have already opted for short term leases or shared workspaces, giving them flexibility to quickly scale up or down depending on budgets, without being locked into lengthy contracts.

Personnel cuts are also being relied on to reduce staffing costs in light of economic pressures, with more than two fifths (44%) of CFOs introducing forced redundancies and others looking at reviewing current staff salary bands (28%) and reducing the number of promotions (27%).

CFOs are also limiting the onboarding of new staff members, with more than a third (36%) reducing new hires and a similar number delaying new hires (33%).