Nonprofit software firm Ohana calls it quits
By John Duchemin
Advertiser Staff Writer
Nonprofit software developer Ohana Foundation fired most of its 89 employees yesterday, shut down normal operations and plans to permanently close within several weeks.
The Honolulu foundation is shutting down because revenues from its educational DVDs, or digital video disks, fell far below expectations, Ohana marketing vice president Frank Haas said yesterday. Ohana since 1998 has been designing and selling the DVDs to school districts on the Mainland.
"Product development took some time, the markets did not develop as anticipated, the economy was slow on the Mainland, and Sept. 11 didn't help," Haas said. "Management didn't see prospects for revenues to justify further investment."
Between 10 and 15 employees will stay on to wrap up affairs for the foundation, which was founded in 1998 by Hawai'i native Annie Chan, a Silicon Valley entrepreneur.
The other employees — about 75 — lost their jobs at noon yesterday. Most were given a two-week severance package and escorted by security guards from the Ohana headquarters on the 22nd floor of Ali'i Place at 1099 Alakea St.
Ohana has not filed for bankruptcy protection, but Haas yesterday did not rule that out. The organization has outstanding debts and is trying to figure out how to repay them with remaining assets, Haas said. He would not say how much debt or cash Ohana has.
Ohana's goal was to produce several hundred DVDs for use in classrooms worldwide. The DVDs serve as educational videos, but also are equipped with links to relevant Internet sites.
At one point, the non-profit had about 120 employees including freelance writers, and was developing contacts to market its DVDs in China.
The foundation's business plan resembled that of a for-profit corporation, in that Ohana was designed to subsist on the revenues from its product sales.
Haas said Ohana had managed to make some sales to schools in Washington, D.C., and Chicago, but that markets seemed to dry up this year as the economy soured. The foundation in April laid off about eight employees, citing production problems and delays in software development.
After the terrorist attacks, schools became "preoccupied with other things," and Ohana's demise was sealed, Haas said.
"For those who were having a challenge prior to Sept. 11, the challenge very often became impossible after that," Haas said.
Ohana's fired employees, which include software developers, freelance and full-time writers and administrative staff, now face a job market flush with thousands of newly unemployed tourism workers.
Jobs in Hawai'i high-technology firms also have become more scarce in recent months.
Ohana's closure is the fourth announcement of major job cuts by a local technology firm this year, and many other tech firms have shed employees.
Kaimuki communications test equipment maker Adtech in July laid off 30 workers, about 10 percent of its work force, citing a cost-cutting effort by parent company Spirent Communications.
In late September, Adtech also announced it would move a 60-employee manufacturing operation to California. Company officials said 30 of those employees would be laid off later this year, and another 15 would have their jobs transferred to California. Only 15 of those jobs will be kept in Hawai'i.
Honolulu-based Internet translation service WorldPoint, which had more than 100 employees in January, has filed for bankruptcy, closed its operations and fired all employees except for president Massimo Fuchs.
