You were so close! But bitshift shifts left by the specified number of bits. Use a minus sign to shift right.
% Sampling Frequency
fs = 8000;
% Sample Period
Ps = 1/fs;
% Sample Time from zero to two seconds in 125us steps (Ps)
t = 0:Ps:2;
% Waveform Frequency
waveFreq = 2;
% Sinewave signal
waveSignal = sin(2*pi*waveFreq*t);
waveInt = int16(waveSignal*2^15);
% Quantize waveform via truncation. (Reduce the least significant bit - LSB)
nBits = 1;
quantWave = bitshift(waveInt, -nBits); % <<<<< minus sign to shift right!
% Cast waveform back into a double data type
quantWaveDub = double(quantWave)/2^(16-nBits);
% Normalise the waveform due to bit change
quantWaveDub = quantWaveDub/max(abs(quantWaveDub));
% Plot Sinewave signal
figure(1);
plot(t,waveSignal);grid on
ylim([-1.5 1.5]);
% sound(waveSignal,fs);
% pause(1);
% Plot Quantized signal
figure(2);
plot(t,quantWaveDub); grid on
ylim([-1.5 1.5]);
% sound(quantWaveDub,fs);
