The panache of a “AA+” rating of the corporate parent by Standard & Poor’s Ratings Service apparently has failed to win over doubters, after UBS Warburg Energy switched off its online energy trading system (formerly EnronOnline) and announced it will terminate nearly all of its 380 Houston-based employees. Those not fired will be offered jobs in a UBS office in Stamford, CT, the company said Wednesday.

Swiss-based UBS AG acquired Enron Corp.’s once formidable online commodity trading system less than a year ago after Enron filed for bankruptcy, and many had considered the deal last January a coup (see NGI, Jan. 14).With the transaction, UBS obtained Enron’s state-of-the-art online system, and set up UBSWenergy.com in Houston. It also was able to hire some of Enron’s former top energy traders to staff the offices, and initially, about 630 were employed.

However, the restructured energy trading arm never floated above the complete washout of the energy merchant sector this year. Rarely issuing statements about its business, or lack thereof, rumors had circulated since its inception that the platform was not getting customers. In the first official hint that business wasn’t all it had expected, UBS fired about 25% of its Houston workforce in August, leaving it with about 400 employees.

On Tuesday, the company sent all of its Houston-based employees the legally required documents to let them know the office will be shut down. It also said that “mass layoffs” are expected by the end of January. UBS spokesman Dave Walker said that 380 in Houston “may suffer permanent employment loss.” UBS had already said in November that it would downsize its Houston operations and move to Stamford, but never detailed how well or how poorly the unit was performing. UBS Warburg said it would continue to provide all of its energy products and markets via a telephone system during its move to Stamford. It did not disclose whether the UBSWenergy.com platform eventually would again be switched on.

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