For the last decade, Bitwise had been selling a powerful dream to cities across the Central Valley and the country. That dream was abruptly shattered when Bitwise furloughed all 900 of its employees on Memorial Day evening.
As tech giants lay off scores of workers amid a sector-wide downturn, employees who once considered the Silicon Valley companies a safe long-term bet are reconsidering their allegiances.In April, Olguin and Soberal sent an email out to employees announcing that payroll would be transitioning from direct deposit to paper checks.
Multiple employees reported that their paychecks, which came from First Republic Bank, started bouncing in April, with one employee’s bank rejecting the check due to “insufficient funds” a week after the deposit was made.Bitwise co-CEOs Jake Soberal and Irma Olguin Jr., right. That unease gave way to real panic around 8 p.m. Memorial Day, when Soberal sent an email informing workers of an “URGENT” all-staff call. By the end of that call, all 900 of Bitwise’s employees had lost their jobs in what the CEOs called a furlough.
On June 2, the landlord for Bitwise’s three Fresno buildings was preparing to evict its errant tenant. Former employees also are pursuing a class-action lawsuit against Bitwise for violating the California Worker Adjustment and Retraining Notification Act, which requires adequate notice for mass layoffs or furloughs, as well as wage theft and numerous other labor code violations.Proposed legislation would require employers who lay off more than 50 workers at a time to provide employees with 90 days notice.
The legal action names Olguin and Soberal as well as the members of the Bitwise board, which includes interim president Douglass. Douglass and the board did not respond to requests for comment. The only communication employees have received from him is a notice Tuesday to preserve company documents and records — indicating the company may be gearing up for a legal fight.Despite receiving millions of dollars from investors and garnering enviable coverage in, Bitwise’s operations — and how exactly it made revenue — may be puzzling to outside observers.
Fresno Mayor Jerry Dyer said the city paid $500,000 and held back the other half until proof of performance. The city verified $120,000 worth of services provided two months ago but has no proof for the rest.
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