Chile, it looks like Friday (December 20) was a tough day Party City residence after a bomb threat. With the holidays just days away, CEO Barry Litwin laid off all of the company's corporate employees without severance pay. Why? After 40 years as the largest party supply store in the United States, Party City is closing all stores.

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Here's why Party City is closing

according to CNNin a crushing video call, Party City's CEO said the company is "winding up." Operations were mostly immediately suspended. Along with the layoffs, CEO Litwin informed the company's employees that their benefits would run out as the company went out of business. The HR director reportedly broke down in tears while explaining that part.

Despite his "best efforts," Litwin said Party City was unable to overcome its financial problems. As a result, the company has collapsed and is no longer sustainable. This is said to have happened when the business tried to fight inflation with higher prices. However, higher prices reduced customer spending.

"It's really important that you know that we did everything we could to try to avoid that outcome," Litwin said. "Unfortunately, it is necessary to begin a process of immediate initiation."

As I said, money has been the computer's biggest problem. Litwin joined the company as its CEO four months ago, a month after the business emerged from bankruptcy after it filed in January 2023. At the time, Party City had about $1.7 billion in debt, and bankruptcy took care of about $1 billion. However, the remaining more than $800 million in debt reduced earnings by 2024.

THESE Company Moves Had Employees Suspecting Trouble

CNN suggested that the staff began to suspect something was up! Two weeks ago, Party City ordered its product development team to go home for security reasons. The company reportedly stopped paying overseas suppliers.

In addition, all company employees were ordered to go home on December 10. The next day, Party City said in an email that employees would have to give one day's notice to visit the office in the future.

Ultimately, however, employees say PC was kept in the dark about the company's financial situation. CEO Litwin addressed that in the video call. "We recognize that the flow of communication has not been how we normally handle sensitive matters like this." said Litwin.

What's next for store employees?

CEO Litwin told CNN the bombshell message was the "hardest" he's ever had to deliver.

However, company employees weren't the only ones outraged by the news on Friday. CNN reported that some of the store's employees also received letters about the company's closing. Party City is reportedly planning to close all stores and lay off those employees on February 28. Between 2022 and August 2024, the company closed more than 80 stores. However, prior to this announcement, it managed to keep more than 800 stores open.

"While Party City believes these closures are in the best interest of the company, we regret having to take this step and would like to thank you for your valuable contributions and service to the company." the letter said.

This week, another major retailer, Big Lots, also announced it will close more than 900 stores.

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