90 laid off as tech Hawaii's fledgling technology sector has lost another player, this time a non-profit company that is putting nearly 90 well-paid employees out of work.
nonprofit closes
Ohana Foundation shuts down
amid declining revenuesBy Tim Ruel
truel@starbulletin.comThe Ohana Foundation, an educational video software maker founded in 1998 by local benefactors Fred and Annie Chan, closed its doors yesterday at Alii Place on Bishop Street, saying that revenues had not met expectations.
The bulk of the employees were laid off and given two weeks' severance pay, while a small group will stay on board briefly to complete the shutdown, said Frank Haas, a former Honolulu advertising executive who joined Ohana Foundation as vice president of marketing in late 1999.
Ohana Foundation's Web site, www.ohanalearning.com, reads: "This domain is for sale!"
Affected employees include educators, programmers, production technicians and marketing people, Haas said.
The Chans, University of Hawaii graduates who have made millions in Silicon Valley, started the Ohana Foundation in Hawaii, saying the non-profit would manufacture and sell educational digital video discs to schools for use by students. The company lured away scores of local employees by offering impressive salaries and used Hawaii as a pilot project, giving away its product for free. Salary details were not available.
Several well-known people in Hawaii left their jobs to join the foundation, including former state Department of Business and Economic Development deputy director Phil Bossert, who was cut from the firm in April.
Ohana Foundation is also closing its smaller offices in Cupertino, Calif., and St. Louis, Haas said.
The Chans made a major investment in the firm, Haas said. The decision to close the company was made by the firm's management, which includes Annie Chan, he said.
Ohana Foundation's skeleton crew is working with several issues, including the firm's creditors. Filing for bankruptcy remains an option, Haas said.
The foundation had a good idea, Haas said, but struggled to break into its market, which included a variety of school districts in the United States. The firm had no direct competitors, but the educational systems proved slow to accept new companies with new technologies.
"It's like a glacier," Haas said. "It's always moving, but it moves slowly."
The Sept. 11 events made matters worse, Haas said, declining to go into details.
The closure follows a string of high-tech implosions in Hawaii and nationwide.
WorldPoint Interactive Inc. fired more than 100 employees earlier this year and closed its offices in the penthouse of 1132 Bishop St., facing a lawsuit from the state. In the same building, wireless manufacturer Uniden Corp. closed its Hawaii office. Adtech, founded in Honolulu in 1967 and sold to a British firm four years ago, recently shifted its manufacturing to California.
In California, the Chans have been dealing with falling earnings at ESS Technology Inc., a Fremont-based company of which the Chan family owns about 35 percent. The firm yesterday reported that its third-quarter income fell 45 percent to $9.2 million from $16.6 million on declining revenues.
Fred Chan is chairman of ESS, which makes computer chips for digital video disc players. The Chans' stake is worth about $219 million at yesterday's closing price of $14.55 a share.