The FT reports that less than a year after acquiring Enron's then highly-rated energy trading unit, UBS Warburg (UBSW) has confirmed that it is axing more staff and closing down the former Enron main trading floor in Houston.
UBSW inherited around 630 staff when it acquired the Enron unit in February and only 100 are likely to remain with the firm after the latest cull and reorganisation. UBSW confirmed that the move was prompted by the 'market contraction' in the energy trading industry.
UBS thought that it got a bargain when it acquired the business, but the deal doesn't look quite so hot now, after the firm has ploughed several million dollars into the unit to try and make it work.
Enron creditors will no doubt be disappointed with the decision as UBSW got the business on the basis that it would 'gift' a certain percentage of profits each year to them. Creditors now expect little or nothing from the once highly regarded and extremely profitable former Enron energy trading business.