Extreme budget management: What expenses businesses had to cut to survive the lockdown

The beginning of 2020 was rough to the majority of the businesses globally. The pandemic made it impossible for some businesses to function and gave other ones new chances.

Nonetheless, all businesses had to compromise some commodities in order to survive. So, let’s review how companies managed their budgets and what were the most popular expenses to cut to survive lockdown.

What was compromised most

The first thing we will investigate is how businesses made budget cuts during the lockdown and what the first expenses for them to cut were. A little spoiler here: they are all about the offline activities of the company.

Cutting the office expenses

One thing that seemed so unusual before the lockdown now becomes more and more comfortable for both managers and employees. It is the new approach to the idea of the workplace and the necessity for everyone to stay home.

Hence, many companies compromise rent and utility bills to cut down expenses and thrive during the lockdown. For these companies, remote work becomes a new normal, as managers can see that it is virtually as productive as it is in an office. Naturally, the companies that can go only this far are those having a stable income and quite independent from the “offline” format.

Saving on salaries

Another measure that companies had to take is optimizing their productivity by saving on salary budgets. Unfortunately, this measure is not as profitable for both parties (employers and employees), but is sometimes the only thing left for an executive. So, let’s see what the lockdown did to the employment market and salaries.

Employee layoffs

This is the most radical decision taken by many executives. In fact, a lion’s share of the crisis we are experiencing is there because the unemployment statistics also show how many individuals cannot participate in the economy.

Re-calculating salaries

Not all people around the world can enjoy both not having to go to the office and a white-collar salary. Not to go as far as laying off the employees, companies save money on salaries a different way. Employees are paid as freelancers or contractors, getting many social benefits stripped off.

Among all the other options, this one seems the most reasonable one: a worker receives the deserved money, only the way they derive it is different now. It is a kind of a full-time freelance, if you will.

Cutting salaries down

Finally, some companies could not afford firing their staff. But they could not afford keeping it either, so the middle ground they reached is as simple as cutting salaries down. Salary cuts varied from 20 to 60 percent and pervaded even such essential fields as healthcare. Nonetheless, regarding the fact that the other choice is a layoff, employees had to stick to the conditions they are experiencing.

Reinventing marketing strategies

Calculating the future marketing budgets, businesses have to find balance between reasonable reputation maintenance and oblivion. Reportedly, 69% of companies chose to decrease the usual ad spend in 2020. As people stay at home and cannot see traditional advertising much, brands also have to prioritize social media marketing, and it makes sense: pricing is transparent and the gains are clear.

The unaffordable expense cuts

Not all the expenses are easy to let go of, but the truth is, companies are able to go on without them post lockdown. Another thing we need to mention is about essential spendings companies couldn’t allow to cut. As opposed to the previous section, these are all about the online environment businesses now occupy.

Online advertising and narrowly targeted marketing

Although marketing expenses were among the first ones for businesses to reconsider, they cannot be given up on completely. In fact, brands and businesses faced the challenge to find new ways to reach their audiences. Plus, it is rather difficult to engage with people who are not that willing to buy stuff (or even leave home). Nonetheless, zero advertising investments will turn into zero sales lately, which is why marketing budgets were redesigned rather than abandoned.


Another field that rests comfortably compared to other businesses is the cloud cybersecurity industry. Indeed, since the only playground left for businesses is online, companies seek enhanced protection of data and software. Again, an error or a hack on a tight budget can cost an owner their business, so security is not the thing CEOs dare to gamble.


Going remote primarily meant reinventing the way communication happens, both within a company and with customers. The instant necessity to go remote boosted the popularity of cloud solutions in online services and telephony so that businesses can keep on working during the lockdown. Using phones to make calls became 20% more popular these days. In such conditions, consumers even tend to talk on the phone more, both with people around them and the businesses.

For the sake of saving money, investing in telephony and cloud solutions makes perfect sense: VoIP connection is stable and reliable, pricing for it is transparent, and the work with a cloud is accessible remotely. Besides, a reliable VoIP termination provider will offer a business custom automation solutions, such as predictive dialing or automated traffic distribution, which help to save money in the long run.


The main challenge for managers and executives was to revise the priorities of their companies: they had to pinpoint what they could compromise and what was better invested in. Hence, everything to do with offline was not of top priority: the traditional idea of the workplace, street ads, and, unfortunately, some human resources. Conversely, everything to do with remote communication grew in its value for businesses. Digital marketing, cloud solutions, automation, and cybersecurity proved to be worth investing in.