Low oil and gas prices are great for commuters, but for many Texas energy companies, it may result in growing debt, business restructuring and employee layoffs. According to a report published by the Houston Business Journal, the Lone Star State’s energy companies that have filed for bankruptcy in 2019 are seeking debt relief totaling $1 billion or more.
While a bankruptcy filing may help a company restructure its balance sheet, its employees generally suffer a significant amount of harm. A company’s employees are usually the first in line to be considered when the decision is made to reduce expenses. It is not uncommon for a company to begin workforce layoffs and departmental downsizing when it is struggling to meet its overhead.
First seven months of 2019 also high in manufacturing and transportation job losses
Nearly 43,000 employees have lost their jobs due to their employers filing for bankruptcy during the first seven months of 2019. USA Today reported that 11.6% of the jobs eliminated were as a result of companies filing bankruptcy petitions. Employees who worked in the manufacturing and transportation sectors reportedly suffered the highest number of job losses.
An unexpected job lay-off is often a life-changing event. A sudden change in a family’s budget may cause an overwhelming financial crisis and increase stress levels for the entire household. Severance pay packages might be available for a short period of time, but they may not last long enough for a primary income provider to find a new job. With the increase in overall living expenses, it is easy to see why an individual would consider filing for personal bankruptcy in order to seek financial relief.