In a significant workforce reduction following financial distress, San Antonio-based Zachry Holdings has issued layoffs to over 4,000 employees after filing for Chapter 11 bankruptcy. The sweeping job cuts affected various skilled workers including carpenters, concrete workers, electricians, and many others who were integral to the construction of the Golden Pass LNG export terminal project in Sabine Pass, Texas. These layoffs were part of the company's response to unforeseen business circumstances, as detailed in a notice to the Texas Workforce Commission.

According to a report by KSAT, Zachry's General Counsel James Old explained, "A majority of Zachry’s employees at the Facility will be impacted," and further stated that the employees either have been or are being notified of their separations from employment, and that such separation will be permanent in nature. This comes as the company is entangled in litigation with Golden Pass LNG, a joint venture between ExxonMobil and QatarEnergy, over unpaid construction costs exceeding billions of dollars. To further complicate the scenario, negotiations regarding Zachry’s exit from the project are ongoing, involving other contractors such as McDermott International, Inc. and Chiyoda International Corp.

State labor data released on Wednesday painted a more alarming picture of the situation than previously understood, revealing that 4,072 workers from the project were laid off. The layoffs exceed initial reports which had set the figure at over 3,000. The figures were disclosed amidst an ongoing bankruptcy process that poses potential delays to the LNG export project.

Zachry Holdings has withheld comment on the current layoff figures. McDermott International Inc. and Chiyoda Corp. continue to maintain operations at the site, despite Zachry's operational and financial upheavals. Additional reports by Bloomberg Law note that Zachry Holdings Inc. alongside several subsidiaries filed for bankruptcy last month, but specifics on the aftermath and future implications for the project in Jefferson, Harris, and Orange counties remain uncertain as to the legal and financial wrangling unfolds.