UBS Warburg Energy, which took over the EnronOnline market earlier this year, has issued no public statements since February, when it completed a deal to obtain Enron Corp.’s exclusive license to the technology to operate the North American natural gas and power trading operations, but sources report that between a one-quarter to one-half — 120 to 250 — of its Houston staff are expected to be laid off.

A recent internal e-mail sent to the UBS Warburg Energy workforce indicated that its parent, Swiss-based UBS AG, is reviewing the 2003 business plan “in light of industry conditions.” The memo from the executive office said that “the energy trading market is a very different size and shape than when we entered it. This will obviously be reflected as we work out our business plan.” UBS “won” the rights to take over Enron’s business just eight months ago (see NGI, Feb. 11).

Overall, the entire energy unit employs close to 630, with 85% based in Houston. Most of the first UBS Warburg Energy employees had worked at Enron, but in the past few months, many of the high-profile traders have left. Greg Whalley, formerly president and COO of Enron, remains the company’s managing director.

UBS Warburg spokesman David Walker declined to comment on the possible job cuts, nor would the company comment on the activity within its trading arm. Noting that UBS continues to see an opportunity for energy trading in the future, Walker said, “since February, the marketplace has changed significantly, and so our business plan will reflect the changes in the marketplace.”

Two months ago, UBS apparently began trading natural gas and power with what sources said was about 15% of Enron’s former trading partners, putting the figure at 40. However, since it took over Enron’s floor, no figures have ever been publicly released. UBS AG is expected to release its second-quarter earnings report on Tuesday (Aug. 13).

©Copyright 2002 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.