The world's largest companies have for the most part failed in their efforts to reduce the cost of functions such as finance, IT, human resources and procurement over the past year, exacerbating the impact of dramatic declines in revenue, profits and earnings, according to new research from The Hackett Group Inc.
Hackett's analysis of the latest financial results of nearly 200 of the 1,000 largest public companies in the world that have reported Q2 2009 financial information showed that only one company in four was able to manage their selling, general and administrative (SG&A) costs in line with revenue reductions over the past 12 months.
While these companies saw average revenue reductions of 23.7 percent, they were only able to cut SG&A costs by 6.7 percent. As a result, SG&A costs as a percentage of revenue for Global 1000 companies have risen significantly over the same period, going from 12.6 percent of revenue to 15.5 percent of revenue.
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