Company in Texas is Now Laying Off Whopping 4,000 Employees

A company in Texas is now laying off a whopping 4,000 employees as a giant company files for Chapter 11 bankruptcy.

Zachry Holdings, a conglomerate with subsidiaries in construction, energy, and other industries, filed for Chapter 11 bankruptcy protection last month.

The move allowed the company to pursue a “structured exit” from its partnership to build a $10 billion liquified natural gas terminal in Sabine Pass.

However, in the wake of the bankruptcy filing, Zachry Holdings has issued layoff notices to the Texas Workforce Commission.

The notices detail massive layoffs in Texas.

A whopping 4,072 employees are now set to lose their jobs in Sabine Pass alone.

An additional 307 positions are being terminated in Baytown, with another 15 job cuts happening in Beaumont.

Addressing the company’s precarious situation, Chairman and CEO John B. Zachry cited “significant challenges and disruptions” that have taken a heavy toll. He pointed to the COVID-19 pandemic as the initial catalyst, which was then compounded by “international geopolitical issues” straining the company’s resources and operations.

“These events have resulted in significant financial strain while meeting targets and keeping the [Sabine Pass] project appropriately staffed,” stated the company.

As Texas braces for the economic fallout, state officials and workforce development organizations are preparing support services for the thousands of displaced workers.

The massive layoffs in Texas represent a heavy blow to local communities that have relied on Zachry Holdings’ operations as a major employment hub.

Layoffs in Texas continue to grow this year as more businesses file WARN notices advising of upcoming job cuts in the state.

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Also Read: Retirees Will Now Receive More Money For Social Security

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Market News Today - Company in Texas is Now Laying Off Whopping 4,000 Employees.
Market News Today – Company in Texas is Now Laying Off Whopping 4,000 Employees.

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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Market News Today - Company in Texas is Now Laying Off Whopping 4,000 Employees.
Market News Today – Company in Texas is Now Laying Off Whopping 4,000 Employees.

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