The second shoe has fallen at Fresno-based Bitwise Industries.
The company issued layoff notices Wednesday to all 900 of its employees — despite an assurance by Bitwise’s now-fired CEOs that companywide furloughs announced on Memorial Day were to be temporary.
A copy of the layoff notice given to employees attributed the layoffs to “unforeseeable business circumstances and other reasons.”
“Due to these unforeseeable business circumstances and other reasons,” it said, “we were unable to provide you more notice.”
Pink slips do little to answer questions about what will come next for a company that raised more than $150 million in outside capital since its founding in 2013. Among the matters left unresolved is what will happen to Bakersfield’s Stria LLC, a 140-employee business processes outsourcing company that Bitwise acquired in August with a promise to pay out compensation over a two-year period.
Kern County government and the city of Bakersfield had contracted with Bitwise to provide workforce development services, not all of which were fulfilled. Bitwise also housed the city’s first business accelerator, and it remains unclear whether that operation might somehow be revived.
Besides workforce training, Bitwise dealt in office real estate and business software services. It was in the process of expanding beyond Fresno and Bakersfield to a total of 10 U.S. cities.
Former co-CEOs Jake Soberal and Irma Olguin Jr., who blamed the furloughs on deals gone bad and pressures related to venture capital, were let go shortly afterward, according to a board news release June 3 that said an investigation has been launched to find out what went wrong. It said the board had not been aware of Bitwise’s financial trouble until it was too late.
The release noted a New York-based specialist in early-stage companies backed by venture capital, Ollen Douglass, CEO of consulting firm Hanover Street Advisors, was appointed president of Bitwise. No further news releases have been issued by the company or its board as reports mount of property taxes going unpaid, landlords pressing for late rent payments and legal actions over business deals that appear to have fallen through.
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