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Enron Mail |
Enron to cut one-fifth of jobs at broadband unit.
04/06/2001 Reuters English News Service (C) Reuters Limited 2001. HOUSTON, April 6 (Reuters) - Energy trading giant Enron Corp. said on Friday it will eliminate some 250, or roughly 20 percent, of the jobs at its broadband telecommunications unit, detailing a move which it has previously described as an internal redeployment of staff. Enron Broadband Services spokeswoman Kelly Kimberly said the company is cutting jobs at the unit, which now employs 1,150 people, because it has completed the build-out of its 18,000-mile (29,000 km) fiber-optic network and because of slow demand for streaming media products delivered to personal computers. "The network is substantially complete now, so that means fewer people are required for technical positions," she said. The job cuts also reflect Enron Broadband's decision to play a less active role in the market for streaming media services, such as video of corporate events delivered to personal computers, where demand had been slower than expected, she said. However, Kimberly said Enron Broadband will continue to pursue entertainment-on-demand services actively. Kimberly said employees whose jobs are being eliminated will be eligible for redeployment to other positions at Enron Broadband Services or other Enron units, although there could be some involuntary terminations. Previously Enron officials had dismissed rumors about job cuts at Enron Broadband Services and had spoken instead of an internal redeployment of staff within the unit without detailing its impact on overall employment there. The company's stock, which peaked at just above $90 last year and was trading in the $80s as recently as mid-February, has recently fallen into the $50s in line with broader weakness in the stock market and among technology and telecommunications stocks in particular. On Friday it was up 95 cents at $56.65. Since early last year Enron has been building a high-speed broadband communications network that it plans to use as a base to build a bandwidth marketing and trading business similar to its huge natural gas and electricity trading operation. Excitement among investors about the broadband business and about Enron's success in developing a strong Internet-based trading platform for energy and other commodities drove an 87 percent rise in the company's share price last year, outpacing a gain of 54 percent for the S&P utilities index. Kimberly said Enron's bandwidth trading operation is continuing to perform strongly, with more than 500 trades carried out in the first quarter, exceeding the total for all of 2000. Despite the jobs cuts at Enron Broadband, she said, the unit is recruiting to fill some other positions.
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