The zombie company apocalypse

Zombies are one of the most recognized horror tropes, which has become more popular in the last decade than ever before. However, beyond our screens, zombie companies exist in the business world as well. Despite limping along, it appears that these companies may be reaching their natural end.

ChatGPT describes a Zombie company as a business entity that is highly indebted and unable to generate enough profits to cover its interest payments and operational expenses. Despite being financially distressed and essentially insolvent, these companies continue to operate with the help of external support, such as loans, bailouts, or government assistance.

The term “zombie” is used metaphorically to describe these companies because, like zombies in popular culture, they appear to be alive but lack vitality and sustainable economic prospects. Their existence is sustained primarily through external interventions rather than their own productive activities.

How do they operate?

Zombie companies typically struggle to adapt to changing market conditions or face fundamental problems within their business models. They may continue to operate by refinancing their debt, negotiating extended payment terms, or receiving financial lifelines from investors or the government. These measures prevent their insolvency or bankruptcy, but they often hinder the reallocation of resources to more productive uses in the economy.

In relation to humans, the Cambridge dictionary of a zombie is “a frightening creature that is a dead person who has been brought back to life, but without human qualities. Zombies are not able to think, and they are often shown as attacking and eating human beings.”

Like these human zombies, zombie companies, because they lure…

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