CFOs Trim Overhead Costs While Maintaining Growth Ambitions

Financial Leaders Balance Cost Control with Revenue Expansion

Chief Financial Officers are entering the 2026 budget cycle with a clear mandate to balance growth ambitions with disciplined cost management amid economic uncertainty, according to a comprehensive survey by Gartner, Inc. The research reveals that 64% of CFOs are planning for their selling, general and administrative (SG&A) budgets to grow more slowly than their 2026 revenue growth rate, signaling a strategic shift toward operational efficiency.

Strategic Cost Management Takes Center Stage

The survey of 142 CFOs and senior finance leaders conducted between August and September 2025 shows that financial executives are taking a nuanced approach to cost containment. Fifty-four percent anticipate SG&A growth to be one to five percentage points below revenue growth, reflecting a deliberate effort to right-size overheads while pursuing top-line expansion. 'CFOs are signaling that operational efficiency, not just revenue growth, will define success in the coming year,' said Randeep Rathindran, Distinguished Vice President, Research in the Gartner Finance practice.

Technology and Process Redesign Drive Savings

CFOs are focusing their SG&A reductions on functions where technology, automation, or process redesign can yield efficiency gains. The most cited areas for budget reductions in 2026 include Human Resources (57%), Corporate IT (53%), Legal and Compliance (40%), Corporate Finance (36%), and Marketing (27%). This pattern reflects a growing willingness to rethink traditional support functions considering conservative hiring plans and AI-driven transformation.

In fact, 42% of CFOs anticipate some level of AI-driven headcount reduction across SG&A or support functions, with 33% expecting reductions between 1-5%. These modest headcount reduction assumptions are expected given AI's improving effectiveness at performing rule-based and judgment-based SG&A work. 'While financial leaders are conservative on overall headcount increases in 2026, they are also factoring in the likelihood of higher costs for personnel and third-party spending, adding to the pressure of achieving operational efficiency,' Rathindran added.

Margin Protection Through Product Optimization

Beyond SG&A, CFOs are betting on product-mix optimization and headcount discipline to protect margins in the face of rising costs. For 2026, 51% of CFOs expect the contribution margin for core products or services to increase, and 44% anticipate a shift of one to five percentage points toward higher-margin offerings in their product mix. This reflects a deliberate effort to protect profitability through product mix optimization rather than relying solely on cost-cutting.

CFOs are also assuming higher personnel costs for 2026. Nearly half of organizations expect a year-over-year increase in direct labor rates of more than four percent, given labor scarcity and tighter enforcement of immigration restrictions in the U.S., for example. Almost three in four CFOs assume annual average merit increases of three percent in workforce compensation.

Operating Expense Savings Targets

CFOs are leveraging SG&A expense discipline as their primary lever to drive operating expense (OPEX) savings and are setting explicit operating expense savings targets. While 37% of CFOs are aiming for modest OPEX savings of 1-2%, a slightly larger share, 42%, is pursuing more substantial savings of 3-5% of overall OPEX. Rather than implementing broad, across-the-board cuts, CFOs are calibrating their approach, seeking incremental cost containment that preserves essential capabilities and drives productivity improvements.

The findings align with broader industry trends showing CFOs taking a more strategic approach to financial management. According to Deloitte's 2025 Asia-Pacific CFO survey, 83% of CFOs prioritize revenue growth as their top objective despite economic headwinds, while simultaneously focusing on cost optimization strategies.

Future Outlook and Industry Implications

The Gartner survey indicates that CFOs are navigating a complex economic landscape by adopting a balanced approach that combines growth ambitions with cost discipline. This strategic positioning suggests that financial leaders are preparing for continued economic uncertainty while maintaining their commitment to organizational growth and market competitiveness.

As organizations prepare for the 2026 budget cycle, the emphasis on targeted cost reductions in specific functional areas while preserving revenue-generating capabilities represents a sophisticated evolution in financial leadership strategy. The integration of AI and automation into cost-saving initiatives further demonstrates how technology is reshaping traditional financial management approaches.