Labour Force Reduction’s Influence on Financial Performance of Manufacturing Companies: A Case Study of Playtime Manufacturers (2011 – 2016)

The objective of the study was to determine the influence of employing labour force reduction initiatives on financial performance of manufacturing companies. The researchers adopted a quantitative methodology. Primary data was collected from the total target population through questionnaires. A census was used to ensure that there was no bias and that findings could be generalised to the entire organisation with accuracy. The first major finding was that manufacturing companies in this developing country use layoffs, furloughs, outsourcing and delayering as labour force reduction methods. The second finding was that employees had adverse emotional reactions after labour force reduction initiatives, however, the emotions did not manifest to physical reactions such as strikes and employee turnover. The final finding was that labour force reduction is positively related to financial performance as measured by Return on Total Assets (ROTA). This research will enable organisation seeking to implement labour force reduction measures to critically assess method, effects and factors to consider before selecting a method best suited for their organisation. The study will add to literature on labour force reduction and performance of an organisation. The research will assist future students researching on labour force reduction as well as academics.