I'm not sure this memo doesn't get you even more noise.   Can't you just get around to your leaders and explain what you are doing?  The memo sounds too negative and could damage morale further.

 -----Original Message-----
From: 	Sherriff, John  
Sent:	Thursday, September 27, 2001 11:45 AM
To:	Palmer, Mark A. (PR); Kean, Steven J.
Cc:	Koenig, Mark; Brown, Michael - COO London; Gentle, Jackie; Frevert, Mark; Whalley, Greg
Subject:	Confidential 


Mark and Steve - Jackie spoke with Mark about the letter below that we would like to send out to Enron Europe and she indicated you had some concerns which is exactly why we want to be decussing this with you.  We have really tried to couch this letter in terms of  the annual budget process and had not intended on sending it out this soon.  But the noise level associated with our internal budget meetings (where we are asking virtually every group for some level of cuts)  is really growing.  I have discussed this with Mark Frevert and sent to Greg (but not heard back from Greg yet).  If we get concurrance then we hope to send out to our employees on Monday.  Your thoughts?

John

DRAFT MESSAGE

Enron has had a very good year to date and we at Enron Europe have played a significant role in this success.  Although Enron's recurring earnings have increased quarter on quarter for the past five years - a 20% annual growth rate since 1997, along with other companies, Enron's stock price has fallen over the past year.  Of course the September 11th terrorist attacks have impacted the financial markets and many of our counterparties are quite involved in managing the insurance, security and other financial consequences of global financial tightening.  This makes it tougher to get new business solutions first and foremost on our customers' agendas.

Enron is still the leading buyer and seller of gas and power in Europe and we believe that we will be affected less than other companies, but we are not immune to tough economic conditions.  If we are to maintain past growth levels and rebuild our share value, we need to focus very closely on our cost base in the current round of Enron Corp. budget reviews.

We will also be analysing much more closely exactly which businesses we derive our earnings from and concentrating our resources on those areas.  We will be taking decisions to put some projects on the "back burner"and reduce the scope of others.

This will inevitably mean that we need to reduce our headcount both in commercial and commercial support groups as we seek to identify the best mix of skills to keep our earnings growth on track.  Whenever possible we will seek opportunities to move employees from units that are tightening to those that are growing but we still expect a net drop in our headcount.  We hope to complete this exercise and communicate the outcome as quickly as possible so that everyone knows where they stand.

We know that this is a tough time for everyone at the moment.  We all have concerns about what is going on in the world and we are taking whatever steps that we reasonably can to keep our people safe.  We are making changes to ensure tighter building security and soon we will be telling you about  changes in our IT network designed to make it more secure from computer virus attacks.

Please feel free to contact either of us, but also talk to your supervisor about any specific concerns you have and remember that you can also make use of the confidential counselling service that is available through HR Online via the Enron Europe intranet site.

We firmly believe that if we work hard together now to achieve these efficiencies, we will create a stronger, more flexible team at Enron which will be better placed than ever to grow our business in Europe and that is the game that we are committed to - a fast growing, profitable and successful company.

John Sherriff & Michael Brown