Question

Describe the problem Enron employees had when the company went bankrupt.

Answer 1

Enron was basically an energy trading company that collapsed due to accounting fraud. The bankruptcy was seen in the year 2001.It was regarded as the fifth largest company according to the Fortune magazine. The bankruptcy had a very negative effect on the present and former employees.Many employees lost their jobs,health care. Even many lost their savings.The company fired many workers due to the sell of many business units. Even many workers who were not considered important for the company were removed. Laid off workers means those workers who were fired due to insufficient work received only 4,500 dollars without considering the number of years they had worked. There was no evidence whether unemployment benefits will be provided to them. All the health and medical insurance of approximately 5,000 workers were cancelled.Even the worker suffering from cancer had to cancel his surgery.

Workers also lost their savings as it was prevented from the company to sell Enron stock. Actually workers save money for retirement purpose in a company sponsored 401(k) plan.It was mainly in the form of company stock.

Enron doesn't allow retired person or employees who has not completed five years of service were not allowed to sell their stock.It was stated by the workers that the top officials were hiding the actual financial status of the company. The top executives and directors sell company stock and received nearly 600 million dollar. So there was the loss of the workers.Even executives who had invested heavily also lost their money in Enron stocks.

Overall the bankruptcy of Enron brought financial crisis and loss of workers.