The aim of this research is to identify the most important positive and negative impacts of adopting policies to reduce the size of employment in tourism companies and also to evaluate these policies particularly in the Egyptian tourism companies, as well as their impact on the performance of its employees.
The field study was based on a purposive sampling technique where survey forms were distributed on a sample of Egyptian tourist companies (category A) in Cairo. These companies were selected according to the numerical density of its employees.
The results of the research show that the adoption of downsizing policies to reduce wages and salaries, as well as the cancellation of temporary contracts and the adoption of the policy of demobilization and the dismissal of the services of some employees by their managers in the tourism companies surveyed in  this study have in turn had a negative impact on the performance of these employees. As a result, the policies in these Egyptian tourism companies have led to a lack of the sense of security among the employees within these companies, which affected their performance and thus their overall loyalty to the company.
 Accordingly, this study has set some recommendations. Among them is,  the need to develop effective plans to manage the process of downsizing of employees  before its  announcement by a long period of time. This is in order to make the application of the policy of layoffs and the removal of some services for employees, as well as the abolition of temporary contracts and hence, reduction of wages and salaries is the last resort after the use of other solutions. These solutions include:- re-training and re-distribution of workers