Global Corporate Bankruptcy Soars as 23,309 US Companies Fail
The global economy is experiencing the worst corporate bankruptcy wave since the 2008 financial crisis. In the United States,
The global economy is experiencing the worst corporate bankruptcy wave since the 2008 financial crisis. In the United States, 23,309 companies filed for bankruptcy in the 12 months ending March 2025, while Europe is seeing corporate bankruptcy rates surge 19%. This isn’t a regional phenomenon. From France’s 57,000 expected insolvencies this year to Italy’s 45% year-over-year jump, the corporate bankruptcy crisis is reshaping business landscapes across developed economies.
Allianz Trade predicts 2.3 million jobs will be directly at risk globally this year due to corporate bankruptcy, with Western Europe accounting for 1.1 million of those losses and North America facing 450,000 job cuts. The sectors being hit hardest span construction, retail, and business services, industries that employ millions and form the backbone of most economies.
The Numbers Tell a Brutal Story
Corporate bankruptcy filings in Q1 2025 jumped 22% compared to the same period last year, marking the highest pace since 2010. Mega-bankruptcies involving companies with over $1 billion in assets are reaching levels not seen since the pandemic’s onset, with 16 such filings in just the first half of this year.
The corporate bankruptcy crisis extends beyond small businesses struggling to survive. Household names are collapsing under financial pressure. Hooters, the restaurant chain once synonymous with American casual dining, has filed for bankruptcy protection. Rite Aid entered bankruptcy proceedings for the second time in under two years and is now closing all remaining stores. Forever 21 filed for its second bankruptcy in six years, highlighting how even previously successful turnarounds can fail in the current environment.
The technology sector is delivering particularly stunning failures. Nikola, the electric truck manufacturer once valued at $30 billion and positioned as a Tesla rival, filed for Chapter 11 bankruptcy in February with only $47 million in cash. Canoo, another electric vehicle startup with high-profile partnerships including NASA and the US Department of Defense, filed for Chapter 7 liquidation with just $886,000 in revenue against accumulated losses of $1.5 billion.
Europe’s Corporate Bankruptcy Acceleration
European nations are experiencing even steeper corporate bankruptcy increases than the United States. Germany recorded a 23% jump in business insolvencies last year, while Italy saw the most dramatic surge at 45%. France leads the developed world in absolute numbers, with 57,000 corporate bankruptcy cases expected this year.
The United Kingdom presents a complicated picture. While overall corporate bankruptcy numbers declined 5% last year, the country is breaking records for large company failures. The combined turnover of companies undergoing insolvency processes rose from 72 billion euros in the second half of 2023 to 96 billion euros in the first half of this year. Nine of the top 20 global corporate bankruptcy cases by asset value are occurring in the United States, with the electronics and commodities sectors suffering most severely.
Corporate bankruptcy rates across Western Europe show that nearly half of all sectors have surpassed pre-pandemic insolvency levels. Transportation is seeing the biggest jump, followed by construction and business-to-business services. The accommodation and food services sector posted a 23.9% increase in corporate bankruptcy declarations compared to the previous quarter.
Why Corporate Bankruptcy Rates Are Spiking
The corporate bankruptcy surge stems from multiple converging factors creating perfect storm conditions for business failure. Interest rates are remaining elevated for longer than most companies anticipated. The delayed easing of monetary policy means businesses that might have refinanced debt at lower rates instead face continued pressure on cash flow and profit margins.
Many companies were previously protected from corporate bankruptcy by government support measures implemented during the COVID-19 pandemic and subsequent energy crisis. As these protections expire, businesses that merely postponed rather than solved their financial problems are finding themselves unable to survive without continued support.
The rise of e-commerce has fundamentally disrupted retail, but the adjustment period is proving fatal for many traditional retailers. Corporate bankruptcy rates in retail reflect an industry that hasn’t finished adapting to profound structural changes in consumer shopping behavior. Companies invested in physical infrastructure now struggle with the fixed costs of stores and warehouses while competing against online-only rivals with lower overhead.
Geopolitical uncertainty compounds these challenges. Ongoing conflicts, trade tensions, and political instability create an environment where businesses struggle to make long-term investment decisions. Companies operating in wait-and-see mode reduce activity levels, further threatening already fragile firms.
The Hidden Corporate Bankruptcy Victims
Small and medium enterprises face existential threats when larger companies fail. The corporate bankruptcy of a major customer can trigger a cascade of failures among suppliers who suddenly lose their largest revenue source. When companies with billions in annual turnover file for bankruptcy protection, the ripple effects extend through entire supply chains.
Construction companies are particularly vulnerable. The sector faces elevated corporate bankruptcy risk in most developed economies, with Allianz predicting it will be among the hardest hit globally this year. Construction firms typically operate on thin margins with significant upfront costs, making them especially sensitive to interest rate changes and economic uncertainty.
Business services companies, including consulting, accounting, and professional services firms, also face mounting corporate bankruptcy pressure. As client companies struggle financially or fail outright, demand for business services contracts. The sector recorded some of the highest corporate bankruptcy increases in Western Europe last year.
Notable Corporate Bankruptcy Cases
Some corporate bankruptcy filings highlight broader industry problems. 23andMe, the genetic testing company that pioneered consumer DNA analysis, filed for bankruptcy protection as the market for such services proved smaller than investors anticipated. The company’s failure demonstrates how innovative business models don’t automatically translate to sustainable profits.
Hudson’s Bay Company, the 355-year-old Canadian retail institution, filed for creditor protection in March owing over $950 million to suppliers, banks, landlords, and government entities. Canadian Tire subsequently acquired Hudson’s Bay’s intellectual property, including its iconic multi-colored stripes, for $30 million. The corporate bankruptcy of such a longstanding brand shocked Canadian business circles.
Northvolt, a Swedish battery manufacturer positioned as Europe’s answer to Asian battery dominance, filed for bankruptcy in March after raising over $15 billion in funding but losing $1.2 billion in 2023. The company struggled with production delays and quality issues that led BMW to cancel a 2 billion euro contract. Northvolt’s failure raises questions about Europe’s ability to compete in critical technology sectors.
What’s Driving Future Corporate Bankruptcy Forecasts
Allianz Trade forecasts corporate bankruptcy rates will continue rising, with a 6% increase expected this year and another 3% in 2026. The delayed stabilization reflects ongoing challenges that aren’t resolving quickly. Access to credit remains constrained, with lenders increasingly risk-averse following the bank failures of 2023. Companies that previously could refinance liabilities or bridge revenue shortfalls through borrowing now find fewer options available.
Trade policy uncertainty adds another layer of risk. The potential for expanded tariffs and trade restrictions creates scenarios where corporate bankruptcy rates could spike even higher. A full-fledged trade war would push global insolvencies up by approximately 8%, according to Allianz modeling. For 2025 and 2026, this would mean 6,800 additional cases in the United States and 9,100 in Western Europe.
The sectors expected to see the worst corporate bankruptcy rates include retail, which continues struggling with the shift to online shopping, and manufacturing, which faces both demand weakness and elevated input costs. Transportation and logistics companies are also at elevated risk as trade volumes remain below pre-pandemic peaks in many markets.
The Employment Crisis Within the Crisis
Corporate bankruptcy doesn’t just eliminate companies. It destroys jobs at an accelerating pace. The 2.3 million jobs at direct risk globally this year represents a 10-year high for both North America and Western Europe. Allianz calculates this figure based on average employees per firm, the 72% of companies that immediately liquidate rather than restructure, and the 32% layoff rate among companies attempting restructuring.
Central and Eastern Europe faces approximately 370,000 jobs at risk from corporate bankruptcy, while Asia confronts 320,000 threatened positions. The numbers represent direct job losses and don’t account for the broader economic impact of reduced business activity, supplier failures, and decreased consumer spending in affected communities.
The construction sector leads in absolute job losses, given the large workforces typical of construction firms and the sector’s elevated corporate bankruptcy rate. Retail follows closely, with store closures eliminating both direct retail positions and related jobs in warehousing, logistics, and support functions.
What Happens Next
Corporate bankruptcy rates are approaching peak levels, but the crisis isn’t over. Interest rate reductions are coming more slowly than businesses hoped, and geopolitical risks show no signs of abating. Trade tensions, particularly between major economic powers, threaten to escalate rather than resolve.
Some sectors face structural challenges that elevated corporate bankruptcy rates merely accelerate. Retail’s adaptation to e-commerce will continue claiming casualties among traditional retailers for years. The automotive industry’s electric vehicle transition is creating winners and losers, with corporate bankruptcy eliminating companies that bet wrong on technology or timing.
The corporate bankruptcy wave demonstrates that post-pandemic economic recovery remains incomplete. Government support measures masked underlying business problems rather than solving them. As support ends and economic conditions normalize, companies that should have failed earlier are finally reaching breaking point.
Sources
S&P Global Market Intelligence
