A bankrupt company now announces painful layoffs in Texas, part of job cuts that will equate to more than 4,000 losses.
San Antonio-based Zachry Holdings is set to lay off another 126 employees from its operations in Baytown, Beaumont, Orange, and Sabine Pass.
This announcement comes as the company prepares to relinquish its contract on a $10 billion project, adding to the woes of its already beleaguered workforce.
These layoffs follow more than 4,400 job cuts announced in late May when Zachry Holdings declared bankruptcy.
The company attributed the bankruptcy and initial layoffs to issues related to its role as the lead contractor on the massive Sabine Pass terminal, just south of Port Arthur.
The latest round of layoffs, as reported to the Texas Workforce Commission, will commence immediately and continue into late August.
Companies are typically required to file a WARN notice, or Worker Adjustment & Retraining Notification, during sizable layoffs to give employees a heads up.
“Zachry deeply regrets the impact caused by Golden Pass’s refusal to use available funds from within the EPC Contract to pay Zachry sufficient funds to allow it to complete its work.
This is not a reflection of the quality of work by Zachry’s employees, its subcontractors or vendors”, the company said.
Zachry has more than $300 million in unsecured debts as part of its bankruptcy filing and is also the subject of a class action lawsuit over lack of proper notice for the mass layoffs in May.
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Other Economy News Today
Applications for unemployment benefits now surge to new highs, a sign that the white-hot labor market is starting to cool off.
First-time applications for unemployment benefits rose last week to 231,000, the highest level since August, per CNN.
Thursday’s data also showed that the number of continuing claims, or applications from people who have filed for unemployment for at least one week, was 1.78 million.
That’s an increase of 17,000 from the prior week, according to the Bureau of Labor Statistics.
The latest numbers come less than a week after the monthly jobs report showed the US economy added just 175,000 positions in April, less than economists expected and a steep drop-off from prior months.
US employers have now added an average of 245,500 jobs per month, versus 2023’s 251,000-per-month average.
Still, hiring remains strong. Although the unemployment rate ticked up to 3.9% last month, it’s the 27th consecutive month that the jobless rate has held under 4%, matching a streak last seen in the late 1960s.
Weekly jobless claims data tends to be volatile but, while one week’s worth of data “does not a trend make,” said Chris Rupkey, chief economist at Fwdbonds.
“We can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.”
“Company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year,” he wrote in a note Thursday.
The Federal Reserve has been battling inflation by raising its key lending rate in the hopes of slowing the economy.
While the labor market has so far resisted those efforts, remaining white hot for the past 18 months despite 11 rate hikes from the central bank, Fed Chair Jerome Powell said last week that demand has “cooled from its extremely high level of a couple of years ago.”
Ian Shepherdson at Pantheon Economics said in a note Thursday: “We’d need to see at least a month of elevated readings to convince us that the trend really has turned.”
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Also Read: A Giant Company Now Announces Unexpected Layoffs in Virginia
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