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Dec. 4, 2001, 12:56PM Enron lays off 4,000Many ex-employees feel betrayed and angryBy DAVID KAPLAN and L.M. SIXELCopyright 2001 Houston Chronicle
Enron Corp. laid off more than half of its Houston work force Monday, leaving 4,000 former employees wondering how bankruptcy would affect their severance pay, health insurance and financial futures.
Enron -- once the energy industry's crown jewel and the place to work -- filed bankruptcy in New York's Southern District Court on Sunday, claiming it owed $31.2 billion and had assets of only $49.8 billion. As lawyers for the company began the first steps in seeking Chapter 11 protection in a Manhattan court, officials in Houston Monday morning divided employees into two camps: Those who would stay and those who would go. Shortly after getting the word, the former employees streamed out of the building with boxes of personal belongings. Many hung around for hours. They paced, talked in small groups, and took pictures of each other for the last time. It was a strange scene, former employee Diane Cook said later in the afternoon. "The ones who seemed the most depressed," she said, "were the ones who were left behind. They're going back to their jobs tomorrow, and it's really going to be empty." Only months ago, Enron had the reputation for being a pot of gold, a place where a secretary could become a millionaire. The high-flying energy trading company seemed to be soaring, and employees were enjoying the ride with hefty salaries, lucrative stock options and pension plans. But their company's stock dropped from a high of $84 to less than the price of a soda at Enron Field in a year's time. For many of the employees, the spectacular collapse of their company is a financial and personal tragedy. Many feel betrayed and angry. "These people who made $50 million a year, they destroyed the company because of their greed," said Charles Weiss, former director of capacity management in the broadband services department. "They're putting families at risk, they've destroyed people's retirements."
"Somebody said there was a picture of Jeff Skilling being used as a dart board. That pretty much sums it up," said Bob Jones, a contract worker who had been employed in the creative services division. "I feel lucky I'm so young," said Leigh Estes, 26, a software engineer. "People in their 60s with many thousands of dollars in retirement, and now it's gone. It's tragic." Estes knows that finding a job will not be easy. The information technology market in Houston isn't that good, she said, nor is the economy in general. And so many former IT professionals from Enron will be flooding the local market. Some said they plan to move. Division heads broke the news to their former staffers, giving them about 30 minutes to pack their bags and leave. They were given handouts with "frequently asked questions" about benefits, stock options and health insurance, but many said that much was still up in the air. "They wanted everybody to go home," Weiss said. "Basically it was just crowd control to get everybody out of the building without a riot." Later in the day, New York bankruptcy Judge Arthur Gonzalez accepted Enron's request for $4,500 in severance pay for each terminated employee. "We anticipate that we will make additional requests in subsequent weeks for additional severance," said Karen Denne, a spokeswoman for Enron. But there is no guarantee the court will give more severance pay for employees, said Robert Rice, an employment lawyer with Rice & Associates. "It will depend largely on Enron's overall financial picture," he said. COBRA, the Consolidated Omnibus Budget Reconciliation Act, entitles Enron employees to group rates for health coverage for 18 months. Employees do have the right to apply for unemployment benefits. They will be paid through Friday. Medical insurance will be provided through the end of December. Former Enron employees are networking. They've created their own Web site to help the job search process and stay in touch. About 4,000 have already listed their names on the site. Many at Enron know of colleagues who worked there 30 years and lost $1 million or more. That's because many employees grew accustomed to a steady diet of lucrative stock options that tied them to the company with velvet handcuffs. They built homes, second homes and bought luxury cars. But now, with their options worthless, many are worried how they'll keep up those payments. For one employee in the financial management area of Enron, losing $100,000 on his 401(k) was bad enough. It paled in comparison to the $400,000 he lost with his Employee Stock Ownership Plan. Many of his shares, which were given to him January 1994, had a strike price of $15 a share. It was a sweet deal when he could resell at $84 a share. But he didn't need the money and opted to hold it for retirement when the tax hit wouldn't be as big. Some employees blame Enron for a good share of their losses in their retirement plans. The company was changing benefit administrators and froze assets in the plan on Oct. 17, the day after Enron officials shocked the market by announcing it was taking a $1.01 billion third-quarter charge to its earnings to unwind unprofitable investments. Steve Lacey, an emergency repair dispatcher for Enron-owned Portland General Electric, said he watched helplessly as his Enron stock plummeted in value. He had invested all of his 401(k) funds into Enron stock. One 68-year-old had been looking forward to a quiet retirement, buying a few acres, planting some crops and spending time with his granddaughter. But his wife, who had worked at Enron for more than 20 years, lost nearly everything. Now they're looking for new jobs. They never imagined that the big, aggressive company would ever come crashing down on them. They weren't sophisticated investors and put almost everything they had into Enron stock. "We don't know a bond from a stock," he said. "We're just working people." Outside the building Monday, police officers on horseback, a horde of media and clusters of laid-off workers gathered. "There's no more work," a former employee said into his cell phone. "It's surreal, isn't it?" asked Bharat Khana, who worked in risk management for a year and a half. He was leaning against a no parking sign, taking it all in. "This is absolutely unbelievable. Who would have expected this from a ... company" that was No. 7 on the Fortune 500 list?
If you'd like to tell us about your years with Enron Corp., contact David Kaplan at david.kaplan@chron.com
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