Why CFOs are cutting costs even as profits rise

Why CFOs are cutting costs even as profits rise unknown

Cost cutting is a top priority for many companies in 2024, even those who are seeing rising profits, The Wall Street Journal reported Feb. 15. 

Even though there is a strong outlook for corporate profits, many companies continue to face a number of financial pressures, according to the report. Those pressures include high interest rates, less pricing power and geopolitical conflicts that are disrupting supply chains. 

Corporate advisers told the news outlet that CFOs are making cost cutting a priority because it's the "best lever they have to improve margins and free up funds to invest in future growth." CFOs also feel more optimistic about the economy's direction, boosting their confidence to announce multiyear cost savings plans. 

Somes CFOs are also targeting costs that resulted from adjustments to pandemic-fueled shocks, according to the report.