Abstract

Downsizing is the burning issue of today’s dynamic organizations. Organizations are shortening their staff to improve their financial performance. This bustle is not only affected its employees at their workplace but also in their private lives. This study has been conducted in order to measure whether the organizations are successful in achieving their objectives of downsizing or not. This study has been conducted on banking sector of Pakistan. The banks, those that downsized during the last decade, are selected as a sample of the study. Pre-downsizing and post-downsizing financial data have been analyzed at two time spans. Six different ratios are calculated as the indicators of financial performance which are as under: loan per employee, deposit per employee, return on assets, return on equity, loan to assets and non-performing loans to loan ratio. To test the hypothesis statistically, paired sample t-test is used. It is observed that banks could not achieve their desired results.

Key words: Downsizing, financial performance, banking sector, Pakistan.