Espahbodi, John, and Vasudevan (2000)

Espahbodi, Reza, Teresa A. John, and Gopala Vasudevan. "The Effects of Downsizing on Operating Performance." Review of Quantitative Finance and Accounting, September 2000.

Studies the operating performance of 118 companies that downsized (reduced headcount or assets by at least 2%) between 1989 and 1993. Each company was studied for an eight-year period (the three years prior, the year of the downsizing, and the four years after). Found that the companies that downsized improved their operating performance relative to their industry and to a control group. This appears attributable to a lower cost of sales, although lower R&D and capital investment were also reported.

Link:  https://link.springer.com/article/10.1023/A:1008321929083