A Study on Impact of Downsizing on Profitability of Construction Industries listed in Bombay Stock Exchange (BSE) India

Abstract: The study investigates the impact of downsizing layoffs on the profitability of construction industries listed in BSE India. In India, construction industries have adopted downsizing long back in the organization to improve the firms performance. For the purpose of the study, Secondary data of 15 Construction companies listed in BSE India have been considered for a period of 10 years from FY.2010 to FY2019. Data has been taken from the companys official website. The variable considered for the analysis is Other Expenses, Returns on Net Worth, Employee Expenses, Number of Employees, and Profit Per Employee. The study has used the Co-integration test to see co-integration between the variables, Ordinary Least Square (OLS) and Vector Auto Regression (VAR) the model used for estimating the impact of downsizing on the profitability of construction companies. OLS and VAR model has been used to draw a conclusion based on the P values and R square. From the result, it can be concluded that, Expect Profit Per Employees are the downsizing variable that has no significant impact on the profitability of the firms performance. Whereas the other Downsizing variables Employee Expenses and the Number of Employee has a significant impact on the profitability of the firms performance