We examine the relationship between various indicators of privatization and employment in transition economies. We test the hypothesis that privatization reduces employment in transition economies by exploiting a panel data set including the period 1989 to 2008 and 28 transition economies. We identified a negative correlation between privatization and employment level. This finding is statistically significant and valid for five different privatization indicators. Thus, the results suggest that privatization reduces employment level in transition economies, controlling for other factors that may contribute to employment in the economy.