Bitwise's issues initially came to light when employees of the Fresno-based company were furloughed with little notice.
FRESNO, Calif. (KFSN) -- Employees of Fresno-based Bitwise Industries have officially been laid off following weeks of uncertainty after financial issues within the company came to light.
In an email sent to employees, Interim President Ollen Douglass announced a "permanent job elimination" that impacts all California locations and others in areas such as Chicago, New Mexico and New York.
The email also told employees they will be able to file for unemployment.
Less than 24 hours before the layoff notice was sent, employees received another letter from Douglass.
It included a Document Preservation Notice, which is normally issued by companies when they are the target of a legal case.
Roger Bonakdar, who represents many of the former employees, says in this case, that letter may be meant as a scare tactic.
"I think that the language in there about holding on the documents was just smoke and mirrors to have the opportunity to say what they really wanted to say, which is to make a false threat of civil liability, or criminal liability. An employee cannot be civilly liable for reporting a violation of law," said Ronakdar.
Douglass, who was on the Bitwise board, has said that they were unaware of the company's financial troubles prior to the furloughs and layoffs.
Both Bonakdar and the Fresno Mayor Jerry Dyer say they have a hard time buying that.
"It's difficult to believe that Jake and Irma would be operating in a vacuum so to speak, without other people knowing what was going on from a board perspective or an accountant involved," Dyer explained.
Bitwise's issues initially came to light when employees of the Fresno-based company learned on Memorial Day that they would be furloughed, effective immediately.
After that announcement, Fresno Mayor Jerry Dyer revealed that Bitwise had not paid city business taxes since September 2021.
Dyer says because of how the furlough was handled, he knew there would be no return of the employees.
"We knew in effect the furlough was a layoff just a different term for it," Dyer explained.
Action News also learned that Bitwise stopped making payments to their employee insurance policies and had not been making 401K contributions since the end of March.
Since then, CEOs Jake Soberal and Irma Olguin Jr. have both been fired. Neither has discussed the matter with ABC30.
A class action lawsuit was filed against Bitwise by former employees who say they were fired without proper notice and not given their owed wages.
Events have been held for former employees throughout the city to provide resources.
The city is working to help employees by hosting a job fair on Friday.
Dyer said had Bitwise followed the law and given proper notice that furloughs or layoffs were coming, employees and their families could have been in much better standing today.
The city has already canceled a contract with Bitwise and could consider a lawsuit in the future if they determine Bitwise misled city leaders.
According to its website, Bitwise's mission is to be a transformative tech company offering technology-based solutions for underserved cities. The company is also a major landlord, renting out offices and coworking spaces in its buildings.