Are companies (HR departments) overreacting to the downturn?

It’s true that the employment sector is not doing too well. All major indices are down, hiring have slowed, vacancies have significantly dried up and companies are  pessimistic. Very pessimistic indeed.  A recent survey  (HR Directors of Australian subsidiaries of multi-national companies) by CEO Forum highlighted the following:

• 74% of companies are reducing their use of contractors
• 70% engaged in hiring freezes
• 66% are reducing headcounts

At a glance, the numbers seems excessive, especially given Australia is not as adversely affected by the GFC as other developed economies. In fact, it looks like the economy grew by 0.4% and Australia, ever the miracle economy, averted an official recession. Some have reservations with the new numbers and the debate continues. My argument is not on the health of the economy, but the reaction to the crisis. Times are indeed bad, but it seems to me companies are overreacting in their response to the crisis, particularly in the management of their most precious asset – people.  It is likely that companies who are overreacting now would find it tough when the turnaround comes around.  

Do you think companies are overreacting to the downturn? Are companies too pessimistic? What is your experience?