As CFOs of American companies reflect on the past year and look toward 2009, they reveal their confidence in the nation's economy and their own businesses is alarmingly low, and also acknowledge the increased responsibility and pressures associated with their role as CFO. As a result, significant cutbacks have been, and will continue to be, necessary across the board, according to the most recent survey of CFOs conducted by Financial Executives International (FEI) and Baruch College's Zicklin School of Business.

In the 2008 fourth quarter "CFO Outlook Survey," the CFO Optimism Index for the U.S. economy sunk to a low of 39.85 - a 46% drop from what it was in 2004 (73.55). Similarly, CFOs' outlook toward their own companies continues its steady decline with the Optimism Index for CFOs' own companies dropping more than 3.5 points to 58.07, an all-time low for the survey.

"Over the past few years, we have observed a steady decline in CFO optimism, and with new all-time lows this quarter, it has become clear that things are getting worse before they get better," said John Elliott, Dean of the Zicklin School of Business at Baruch College. "These findings are reflective of the broader sentiment we are seeing - from dismal unemployment numbers to a rise in corporate restructurings - and demonstrate the magnitude of uncertainty clouding the financial community as we head into 2009."

Amidst this challenging environment, CFOs overwhelmingly perceive an increase in the breadth of responsibility and pressure placed on them as CFO by both their employees and shareholders. When asked to compare with this time last year, 88 percent state it is now higher.

Cutbacks Now, and What's Ahead for 2009

CFOs reported that, for cutbacks implemented in 2008, hiring, capital spending, layoffs and marketing/advertising topped the list, with the same areas most frequently identified for cutbacks in 2009. Ninety-two percent of CFOs intend to implement some form of cutbacks in 2009, compared with only 66 percent in Q1 of this year. Nearly 40 percent plan to conduct layoffs in 2009 (versus 24 percent in Q1 of this year), while nearly 80 percent plan a hiring decrease or freeze in the New Year. Moreover, in every single category, cutbacks planned for 2009 increased from already-high 2008 cuts.

A large majority of CFOs (80%) have cut discretionary spending at their companies for the fourth quarter:

* Areas hit hardest by these cuts were: holiday events (cut by an average of 32%); overtime (cut by an average of 22%); and entertainment (cut by an average of 18%).

* While training and education for staff, corporate sponsorships, employee perks and travel were all slated to receive percentage reductions in the double-digits, executive travel was least affected, with an average cut of 11%.

Year-end bonuses were also identified as a major target for companies' cutbacks:

* More than a third (38%) have specific plans to reduce or eliminate year-end bonuses for employees across the board.

* 44 percent intend to reduce or eliminate year-end bonuses at the C-suite level or above.

Philanthropy did not prove immune to cuts either:

* 50 percent of those CFOs whose companies have historically given declared that their charitable contributions have decreased during 2008.

* 33 percent of that same group reported that their giving strategies have shifted to be more aligned with achieving business goals.