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Enron Europe to cut jobs Friday, power delivery halted

Enron Europe is expected to announce job cuts at midday on Friday and has stopped delivery of wholesale electricity in continental Europe, a trade source said on Friday.

"There's a meeting at midday and everyone is expecting they will announce selective redundancies but certain people will have to stay to help out the administrators," he said.

On Thursday, Enron's European arm went into creditor protection, or administration, after its parent company cut funding to the trading operation in London.

Enron employs about 5,400 European staff, excluding those at UK regional water utility Wessex Water which is not under administration.

This figure includes staff at other businesses, such as the UK Teesside power station, Enron Wind and Enron Credit which are also not covered by the administration order.

About 2,000 staff work in London where the company's European trading operation is based.

The source said Enron had closed its position on all electricity grids on mainland Europe and had stopped delivering wholesale electricity to its customers early on Friday.

The decision should not mean power cuts as Enron's customers were mainly other traders or large industrial consumers who will now have to look to other suppliers for their electricity.

"We are zeroed everywhere on the continent. We spoke to the grid operators and it made sense to stop delivery to avoid the chaos with nominations that happened yesterday," he said.

Enron has a retail business supplying small and medium-sized companies, Enron Direct, but this is not under administration. Enron said on Friday it is still operating.

Enron accounted for about 30 per cent of German wholesale power trading and was also a major player in the Nordic power sector as well as in the UK gas and electricity industry.

Days before the crisis broke in October, Enron said it was doing about 200 electricity deals a day with about 300 counterparties in Europe.

The source could not comment on gas in Europe or on delivery of electricity to the UK grid.

Enron's UK Teesside power station and those in Poland, Italy and Turkey are not under administration. On Friday, Enron said the Teesside power plant was still operating.

Administrators PriceWaterhouseCoopers said on Thursday that job losses were inevitable and Enron's "extraordinarily complex network of integrated business" would take time to work through.

It said there was already "very serious" interest in Enron's European metals business but added its main focus would be on the company's large physical assets and the trading position of the group.

In the UK, a company in financial distress is allowed to continue trading under the control of an administrator who attempts to reorganise it.

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