Even before Hurricane Harvey devastated thousands, destroyed billions of dollars’ worth of property, and caused long-term damage to the Texas economy, some Houston businesses were already facing major economic hurdles. In fact, a larger number of Houston businesses have announced layoffs and closings that have nothing to do with Hurricane Harvey. Let’s take a look at some examples of Houston layoffs and closures to give you an idea of what the state is going through.
Ensco Closing Atwood Oceanics Headquarters, Job Cuts Loom
On October 6, London-based Ensco PLC (NYSE:ESV) announced the completion of its acquisition of Houston-based Atwood Oceanics Inc. The deal is valued at around $840.0 million.
When Ensco first announced the definitive merger agreement back in May, it said the transaction would join two leading offshore drillers providing compelling value to shareholders. This was possible in large part, as Ensco CEO Carl Trowell said, because his company was bringing together “high-specification rig fleets, technology and innovation, and talented rig crews…”
When the deal closed, Trowell echoed that sentiment, saying, “We are excited to complete this transaction and to welcome our new employees, customers and shareholders to an even stronger Ensco.”
Unfortunately, Trowell was not extending that warm welcome to all of Atwood’s talented employees, leading to some Houston layoffs. On October 5, Ensco filed a report with the Texas Workforce Commission, saying it intends to conduct a mass layoff of most of its employees currently working at Atwood’s headquarters at 15011 Katy Freeway in the Energy Corridor.
The Ensco acquisition means nearly 80 Atwood employees will be out of a job. The first job losses were expected to take place on or about October 6 and will be completed by March 2018. The jettisoned employees are not represented by a union and do not have bumping rights, meaning those with more seniority cannot take jobs from those with less seniority.
Prior to being acquired by Ensco, Atwood Oceanics was actually doing OK, in spite of the oil bust. The company had signed enough contracts before oil prices tumbled and drastically cut costs. Over the last two years, Atwood gutted around 60% of its workforce, from nearly 2,000 to around 800 before the merger with Ensco was announced in May.
Most recently, in late January, Atwood announced it was laying off 60 employees. The company noted that its Atwood Condor rig was being closed (or “stacked”) because it did not have a drilling contract.
With the oil industry still struggling, it is unlikely that these will be the last job cuts to hit newly minted Ensco employees in Houston.
Frankel’s Costume Company Closing After Halloween
Frankel’s Costume Co., Inc., a family-owned Houston-based institution since 1950, is shuttering its operations after Halloween. The store will be closing at the end of the year.
Its owners, Lonnie and Terrie Frankel, have said they are selling the massive property to a Houston developer. Sold this past June, and the Frankels are not sure what will happen to the property come January 2018.
Terrie Frankel noted that the family had three different offers on the property and they finally settled on a price they wanted. The area around Frankel’s Costume has experienced significant development since they first moved into the neighborhood in 1999.
Frankel’s Costume, which first opened its doors as a magic shop (originally called Morty’s Magic Mart), has an inventory of 60,000 rental costumes and 20,000 square feet of showroom space.
NRG Energy to Effect 84 Houston Layoffs
NRG Energy Inc (NYSE:NRG) filed a notice with the Texas Workforce Commission saying it would be laying off around 85 employees. The job cuts affect maintenance workers at NRG’s Central Repair Shop at 12307 Kurland Drive. They’re expected to start on December 1, 2017, and be completed by January 5, 2018.
These Houston layoffs are part of NRG’s company-wide layoffs stretching across the U.S.
Back in August, NRG reported a second-quarter loss of $642.0 million, a huge increase over the $276.0-million loss recorded in the same prior-year period. To help bolster its bottom line and boost its sagging stock price, NRG announced a Transformation Plan that would see it sell off up to $4.0 billion in assets, including most of its solar and wind projects.
In August, NRG started using contract workers to help maintain power plants in the Houston area. The move came just days after the Fortune 500 company announced its Transformation Plan. At the time, NRG did not say how many of its workforce would lose their jobs, but at least 100 employees based in Houston were shown the door.
“Ensco plc Completes Acquisition of Atwood Oceanics,” Ensco plc, October 6, 2017.
“Ensco plc to Acquire Atwood Oceanics, Inc.,” Ensco plc, May 30, 2017.
“2017 Notices,” Texas Workforce Commission, October 5, 2017.
“Frankel’s Costume closing for good,” KHOU-TV, October 9, 2017.
“This will be the last Halloween for Houston’s Frankel’s Costume Company,” Houston Chronicle, October 9, 2017.
“Frankel’s Costume,” Frankel’s Costume Co., Inc., last accessed October 10, 2017.
“NRG Energy’s Houston staff reduction planned for December,” Houston Business Journal, October 2, 2017.
“NRG Energy, Inc. Reports Second Quarter Results and Reaffirms 2017 Financial Guidance,” NRG Energy, Inc., August 3, 2017.
“Apply to Jobs,” Billeter Recruiting, last accessed October 10, 2017.
“NRG Energy Launches Transformation Plan,” NRG Energy, Inc., July 12, 2017.