Bitwise board fires CEOs, including University of Toledo grad, amid furloughs and financial woes

TOLEDO, Ohio (WTVG) - The board of directors at Bitwise Industries fired its co-CEOs, including a University of Toledo graduate who helped start the tech company that was weeks away from opening up a Toledo campus at the newly-renovated Jefferson Center, according to a press release issued Saturday.

The Fresno, California-based company announced this past week that it had furloughed its entire staff of 900 employees and suspended operations. It had been quiet until Saturday’s leadership shakeup announcement.

The Board of Directors launched an investigation into what led to the financial problems, they announced Saturday. The board named Ollen Douglass as the interim president, effective June 1, after it decided to fire co-CEOs Irma L. Olguin Jr. and Jake Soberal. Olguin Jr. graduated from the University of Toledo with a Computer Science and Engineering degree in 2004. She helped launch Bitwise in July 2013.

“It was an incredibly difficult decision to suspend operations at Bitwise Industries and furlough the hardworking team members. The Board of Directors was recently made aware of the company’s cash deficit by management and took immediate action as a result,” Douglass said in a news release. “The Board of Directors is taking this matter very seriously. We are committed to determining the root cause and will continue to take swift action.”

The company was in the final stages of renovating the former Jefferson Center in Toledo to be a place where it could train people to work in the tech industry. Its focus was on building tech economies in what company leaders called under-estimated communities like Toledo.

The future of the Jefferson Center project is now in limbo. Local officials were blindsided by the news that Bitwise furloughed its workforce and were scrambling to figure out what was next. Organizations that gave loans or grants to the company said they were either halting payments or working to decide how to proceed.

This week, we learned Bitwise was behind on paying taxes and late on rent payments at some of its other properties. The company would buy abandoned or run-down properties with the hopes of renovating them into tech hubs.

Soberal had told reporters he thought the company might be growing too big too fast, but that’s the Silicon Valley model.

“They compare it to other tech companies. Amazon was losing money for years. Any of the other big names in tech -- that’s kind of the model,” said Daivd Taub, a reporter covering Bitwise for gvwire.com. “It’s not about how much money you’re making now. It’s the potential to make money you’ll make down the road.”

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