HOUSTON — Enron Corp. is laying off 7 percent of the roughly 1,200 employees in its pipeline group this week in an effort to cut costs, the company confirmed Wednesday.
Spokesman John Ambler declined to be more specific about how many people were losing their jobs other than to say it was fewer than 100 workers at PipeCo., a holding company consisting of Enron's interests in three U.S. pipelines.
Stan Horton, chief executive of the group, informed workers of the layoffs via e-mail on Tuesday.
Since Enron sought bankruptcy protection in December 2001 in a whirlwind of hidden debt, inflated profits and accounting scandals, the company has consistently depended on its pipelines and power plants for steady income. Enron solicited bids on those assets for several months, but low offers prompted the board to put its pipelines and power operations in two separate companies that will have new names once Enron emerges from Chapter 11 protection.
Enron is lumping another 19 international power and pipeline assets in a separate company, temporarily dubbed "InternationalCo.," in which creditors also will have shares.
Roderick White, an employee at PipeCo., is one of those whose job was eliminated.
White worked in the gas control operation in Houston, where he and his colleagues monitored pressures and opened and closed valves controlling pipelines. He said since the bankruptcy filing, Enron's leaders consistently praised workers who stayed with critical operations.
"They would say, 'We need you to come to work with a good rapport, a good attitude, 100 percent.' And we did that," White said. "We were so important we needed everyone to come, and now they cut me."
The layoffs come more than three months after U.S. Bankruptcy Judge Arthur Gonzalez in New York approved $29 million in retention bonuses for up to 900 workers deemed critical to the company's restructuring. Ambler said those bonuses weren't given to pipeline employees, because the pipelines aren't bankrupt along with Enron and other subsidiaries.
Ambler said layoffs were needed to be competitive with other pipelines and "to ensure the long-term viability of the pipeline companies as well as a reasonable return" for creditors.
He said Enron wasn't announcing how much would be saved from layoffs, but would note it in financial statements to be filed with bankruptcy court.
Enron has about 11,200 employees, most of whom work for subsidiaries that aren't bankrupt. The company had more than 20,000 workers before it imploded.