Half of C-suite executives considering budget cuts in Q2, survey reveals

As global economic pressures continue to mount, nearly half of C-suite executives are considering budget cuts in their respective functions by the second quarter of 2025.

According to a recent Gartner survey, the forecasted disruptions in supply chains, a drop in consumer demand, and persistent inflation have executives bracing for tough decisions.

In a March 17, 2025, webinar poll, more than 600 corporate leaders revealed their concerns about the uncertain economic landscape.

Figure 1: As a result of the economic impact and uncertainty of new U.S. Federal Policy Changes, which of the following response actions are you planning to take in Q2? (select all that apply)

A Tumultuous Forecast for 2025

The Gartner survey paints a picture of a business environment plagued by unpredictability.

A significant 58% of respondents anticipate disruptions in their supply chains due to anticipated tariffs, while 42% are preparing for reduced consumer demand.

Additionally, 41% expect inflationary pressures to continue affecting their operations well into the next year. These figures signal a wave of financial caution and strategic belt-tightening across sectors.

“Organizations are navigating unprecedented levels of uncertainty, and our survey reveals that many are taking proactive steps to adapt,” said Alexander Bant, Practice Vice President and Chief of Research for Gartner’s Finance practice.

“CFOs and their teams must ensure that steps taken to help guide cost cuts are done in a measured way that doesn’t impact resilience and long-term performance.”

Strategic Actions in Response to Economic Uncertainty

In light of these economic pressures, C-suite executives are considering several strategic responses to safeguard their organizations.

Almost half of the survey respondents are planning to reduce their budgets and spending as a way to maintain financial health during periods of heightened uncertainty.

At the same time, flexibility and adaptability have emerged as critical strategies, with 38% of respondents focusing on dynamic shifts in their product offerings, go-to-market strategies, or geographic sales mixes.

A key takeaway from the survey is the growing importance of operational flexibility. As companies face evolving challenges from new U.S. federal policy changes and global economic instability, the need for agility has never been clearer.

Flexibility in operations not only ensures resilience but also fosters the ability to capitalize on emerging opportunities.

Operational Flexibility: A Key to Resilience

To navigate the current economic climate, Gartner identified three key tactics and mindsets that finance leaders can adopt to enhance operational flexibility:

1. Cut to Reduce Spend

Efficient growth companies are emphasizing the need for adaptable resource allocation to respond quickly to market changes and technological advancements.

By reallocating resources to high-return areas like emerging technologies and market opportunities, finance teams can ensure that investments continue to drive growth and innovation.

1. Optimize Performance

Operational flexibility thrives in an environment where finance teams utilize agile decision-making processes. This approach enables rapid responses to external pressures and fosters a culture of experimentation and learning.

Organizations that empower innovation through continuous development are better equipped to meet new challenges and seize new opportunities.

1. Invest in Future Sources of Value

A strategic approach to cost management is essential for enhancing competitive advantages. By focusing on differentiating costs that fuel revenue and profit growth, finance teams can direct resources toward capabilities that position the company for long-term success.

At the same time, minimizing commoditized costs through automation and standardization can improve operational efficiency and flexibility, freeing up resources to support critical growth areas.

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