Bitwise terminations ‘vile,’ workers’ lawyer says. ‘Betrayal,’ Fresno mayor adds

About 300 to 400 Bitwise Industries employees in Fresno and a total of about 900 of the company’s workers throughout California and across the U.S. have officially been terminated from their jobs.

The move, announced via emails sent to affected employees Wednesday morning, comes just over two weeks after now-fired Bitwise co-CEOs Jake Soberal and Irma Olguin Jr. announced near the end of the Memorial Day Weekend that all of the company’s workers were being immediately “furloughed” on a temporary basis.

“We regret to inform you that your position will be eliminated Wednesday, June 14, 2023,” states the email from interim Bitwise Industries president Ollen Douglass. “This is a permanent job elimination” for employees at the company’s California sites in Fresno, Bakersfield, Merced and Oakland, and nationwide in Colorado, Illinois, New Mexico, New York, Ohio and Texas.

Fresno-based Bitwise Industries was founded in 2013 as a hub to provide technology training classes in website development and software coding, as well as providing support for budding small-business technology entrepreneurs. Since that time, it expanded its interests into real estate development, taking a hand in rehabilitating aging buildings in downtown Fresno and leasing space to other businesses.

In recent years, the company embarked on an aggressive effort to develop sites or acquire other technology enterprises in Bakersfield, Merced and Oakland, as well as what Bitwise described as often-overlooked “underdog” cities including Greeley, Colorado; South Chicago, Illinois; Las Cruces, New Mexico; Buffalo, New York; Toledo, Ohio; and El Paso, Texas.

Wednesday’s job action was a “mass layoff, which is due to unforeseeable business circumstances and other reasons,” Douglass said in the email to workers. “Due to these unforeseeable business circumstances and other reasons, we were unable to provide you more notice.”

Fresno Mayor Jerry Dyer said Wednesday that the termination notices to employees “just compounds the pain that they feel, the hurt that they feel, the betrayal that they feel.”

And Dyer added that amid the growing cavalcade of revelations and accusations about the company’s financial operations and other potential problems, “I wouldn’t be a bit surprised if there wasn’t some kind of federal criminal investigation that follows as well.”

Attorney for employees blasts Bitwise leadership

Fresno attorney Roger Bonakdar, who is representing employees in a class-action lawsuit filed last week in Fresno County Superior Court, confirmed to The Fresno Bee that his clients had received the termination notices.

“The label that Bitwise put on this matters almost not at all,” Bonakdar said about the differences in terminology between “furlough” used on May 29 and Wednesday’s termination notices. “Their email exposes the fact that everyone was truly terminated on May 29. … In reality, they were terminated when their payroll checks bounced and Bitwise did nothing about it.”

“What matters is their conduct. What matters is what is measurable on the ground,” Bonakdar added. “This new email is simply some ill-advised scramble to try and deflect what a blind man can see – that Bitwise collapsed right before the furlough notice. Bitwise had collapsed before May 29.”

Bonakdar added that Wednesday’s termination notice added insult to injury after the company on Tuesday sent employees notices warning workers to keep company documents and records. “This is what is commonly referred to as a ‘Document Preservation Notice’ or ‘Preservation Notice,” the email stated, “and there can be civil or even criminal penalties if you do not comply with this notice.”

“These guys – just when you think they couldn’t be more vile, they show us their reckless indifference and malice,” Bonakdar said. “These guys have the audacity to make their first communication to these people to be a threat; that’s the first thing they do.”

Other than Douglass’ June 2 announcement that co-CEOs and co-founders Soberal and Olguin had been fired, Bonakdar said there had been no other communication from the company to its employees beyond the preservation notice and Wednesday’s termination emails.

“They have been completely silence on the three weeks of wages that they stole, the paycheck deductions (for health insurance and 401(k) savings plans) that were pocketed,” Bonakdar said.

Fresno mayor not surprised by latest email to workers

Dyer said Wednesday that, just as the city received no notice of the May 29 furloughs, his office was similarly not informed ahead of time of the mass terminations as required under California’s Worker Adjustment and Retraining Act. The law requires companies to provide affected employees, as well as the state Employment Development Department and city and county leaders, at least 60 days notice ahead of any mass layoffs.

But Dyer also said he was not surprised that termination notices were issued. “I think everyone anticipated that. … The furlough occurred suddenly, so I think the layoff notices that also took effect today was done suddenly as well,” he said. “I think it’s just a pattern that Bitwise has become accustomed to for not giving their employees any kind of notice.”

“Unfortunately, we have a lot of Bitwise employees that are struggling right now, and this just adds to it,” Dyer added. “We knew in effect that the furlough was a layoff, just a different term for it.”

Dyer noted that he expects many of the affected Bitwise employees to benefit from a job fair that will be held at City Hall from 10 a.m. to 1 p.m. Friday. “We have 52 employers in our city that will be here; they’re all going to be hiring,” he said. Dyer added that City Hall will also be looking to hire qualified Bitwise employees for some city vacancies as well.

“Had we been given the proper 60-day notice, we would have immediately put forth the effort to organize a job fair, probably within two to four weeks,” the mayor said. “And I’m very confident that those 400 employees at Bitwise would be employed (at new jobs) by this time.”

As it is, Friday’s job fair will come less than three weeks after the furloughs were abruptly announced.

Potential for more litigation against Bitwise?

Dyer said that to date, he has not spoken with either Soberal or Olguin, nor has he heard from Douglass or other members of the Bitwise board of directors.

But, he added, he has doubts that the board was blind to the financial condition of the company. “They said in the paper that they were caught off guard,” Dyer said. “Whether that’s true or not, that’s the statement they made.”

“It’s difficult to believe that Jake and Irma would be operating in a vacuum … without other people (from the board or accountants) knowing what was going on,” Dyer said. “Jake and Irma are pretty slick, pretty good, but I don’t know if they were that slick to be able to pull the wool over everyone’s eyes,”

Dyer referred to lawsuits that have already been filed against Bitwise, Soberal, Olguin and others, including a pair of class-action lawsuits on behalf of employees in California and other states, investors who put money toward Bitwise’s vision for uplifting people and communities in need; and a Texas company that alleged fraud against Bitwise in its real estate dealings.

“Obviously they victimized a lot of people within the company, they victimized a lot of investors, so what (Soberal and Olguin) did, they’re very good at, and that’s disguising what Bitwise was really about in terms of their financial difficulties.”

But Dyer added that while he feels for employees, it’s uncertain if the city is in a position to join the lineup of lawsuits.

“These were loyal employees that were sold a bill of goods, and they were very passionate about what they did in serving underserved communities in our city,” Dyer said. “Unfortunately, they were taken advantage of just like the investors.”

The Bee reached out by phone to Bitwise and by email to Douglass and the company’s board, but had not received a response as of Wednesday afternoon.