Analysis of the effects of cost cutting measures on financial perfomance: a case of ZESA National Training Centre

Abstract

The main objective of the study research was to analyse the effects of cost cutting on financial performance using a case of Zesa National Training Centre. The major issue that gave rise and prompted the researcher to study across this area was the increased levels of recurring losses in the organisation of which no increase in financial performance was being marked. The study employed a mixed approach in answer the research questions which were both quantitative and qualitative. The information and data was gathered from secondary and primary sources which consisted of financial statements and questionnaires as well as interviews. The key findings of the study show that cost cutting was significantly and statistically negatively impacting on financial performance. The study also revealed that the management of Zesa National Training Centre is not regularly reviewing the cost cutting strategies they implement; hence the measures are proving to be ineffective in reducing the costs of the company. From the 3 members of the management at the company, the researcher gathered that there is shortage of procurement personnel in the finance department; hence it is difficult to implement the cost cutting strategies. The researcher distributed 22 questionnaires and 16 of these were returned, from these respondents the researcher could clearly conclude that employees of this firm agreed that the major challenge in cost cutting is high energy consumption. It can be concluded that cost cutting at Zesa National Training is proving to be ineffective since the financial performance of the company has not improved from 2015 to 2017.