Employee Downsizing: Analysis and Effects

During the late 1980\u27s and early 1990\u27s, many corporations felt pressured by global competition to increase profits through improving their internal processes. One method of increasing profits is to downsize or to decrease the number of employees. This research examined a sample of companies and analyzed the relationship between the number of employees and sales and net income. The results of the study suggest that as the number of employees decreased, sales also decreased. As the number of employees decreased, net income increased when companies used downsizing as a long-term strategy