Officials for Peabody Energy, the largest coal-producing company in the world, announced Wednesday they are filing for bankruptcy amid plummeting profits and mounting debt, which inevitably spells bad news for the company’s nearly 8,000 employees.
According to one CNN report:
Peabody reported a loss of $2 billion last year. Revenue tumbled 17% to $5.6 billion as the average price and amount of coal that it sold fell. It warned of further declines this year due to reduced use of coal by U.S. utilities, along with lower demand from overseas markets.
Shares of Peabody (BTU) have already plunged more than 75% this year to trade near $2. The company has roughly 7,600 employees.
Peabody began in Chicago in 1880. After operating for nearly 140 years, the company saw a drastic drop in its stock value from $64 per share at the end of 2010 to a mere $4.50 per share as of last April. The company has already laid of more than 20 percent of its workforce since 2010. Reports show the company is now more than $10 billion in debt.
The coal industry has been under unrelenting attack in recent years, in no small part due to President Obama’s Clean Power Plan aimed at reducing the nation’s carbon emissions. Under his direction, the Environmental Protection Agency has rolled out a slew of new carbon regulations aimed at shutting down the majority of the country’s coal-fired power plants, devastating coal mining communities and putting thousands of former coal miners out of work. The regulations, currently on hold via a Supreme Court order issued earlier this year, have already contributed to the closure of over 200 coal-fired plants in the United States, which in turn has caused the closing of hundreds of coal mines.
Arch Coal, the nation’s second largest coal company, already filed for bankruptcy in January. The company employs some 4,600 workers. Both Arch and Peabody have numerous holdings in communities that depend on coal mining as a primary job source, including parts of rural Kentucky, Virginia and West Virginia.