Oil and Gas Industry Continues to Struggle with Layoffs and Bankruptcies

Oil and Gas Industry Continues to Struggle with Layoffs and Bankruptcies

September 10, 2020

The oil and gas industry has experienced tremendous turmoil over the past few months following the drastic drop in demand that plunged oil prices during the COVID pandemic.

According to CNN Business:

The Petroleum Equipment & Services Association estimates 103,420 jobs have been lost since the pandemic started, as dozens of producers and service providers have gone out of business. The industry, once booming, wasn’t in a good place even before Covid struck. Companies were struggling to stay afloat and looking to merge, burdened by high levels of debt in a global energy market flooded with supply.

Texas has lost 59,000 of the total 103,420 jobs lost in the oil and gas industry since the pandemic. Bobby Bounds ran a successful industrial painting company that catered to the oil and gas sector in Midland, Texas. On March 9, after the Dow crashed more than 2,000 points Bounds lost half a million dollars in active jobs. Bounds’ business fell subject to the crash and he was forced to close his doors and let his workers go.

“It’s kind of a slow death. You know, you start laying people off and finishing up the work you have and hoping the phone would ring,” Bounds told CNN, “They’re standing there in front of me and they can’t feed their kids. They can’t pay their rent.”

The crisis is particularly acute in Midland, the heart of the US shale industry. Midland’s unemployment rate has risen nearly five-fold in a year, from 2% to 9.4%, according to figures from the Texas Workforce Commission. In neighboring Odessa, it is at 13%, the highest in the state.

Thousands of small to mid-sized businesses across the country that rely on the oil and gas industry like Bobby Bounds have been forced to close their doors and let workers go. In oil and gas states the consequences are ever so apparent.

The 10 million hard-working American jobs that are supported by the oil and gas industry deserve and need to be protected. The industry is key to our country’s economic recovery and future.