Tech firm will close HQ

By John Duchemin
Advertiser Staff Writer

Pihana Pacific, one of the largest Hawai'i-based technology companies, said yesterday that it plans to close its headquarters and lay off or transfer dozens of employees as part of a recently announced merger.

Pihana, a 2-year-old Internet data center company, notified the state Department of Labor and Industrial Relations yesterday that it will lay off or transfer 53 of the headquarters' 54 employees by Dec. 3. That's also the expected closing date of its three-way merger with Equinix and Singapore Telecommunications Telemedia.

Pihana human resources director Ryan Okahara said yesterday that the Honolulu headquarters was being eliminated as an "inevitable redundancy."

"As in any other merger, we will not need three headquarters," Okahara said.

Under the merger announced last week, data center company Equinix, based in Mountain View, Calif., will absorb Pihana's seven data centers into its network. A handful of employees will remain at Pihana's airport data center, Okahara said.

Other Hawai'i employees will be offered transfers to offices in Asia or on the U.S. Mainland. The company has not decided who will be offered transfers or which senior managers will be retained, Okahara said.

If the merger goes through, it will mark the end of one of the bigger players in the Hawai'i technology industry. Pihana made national headlines in October 2000 when, under founder Lambert Onuma, it obtained about $240 million from a consortium of venture investors led by Goldman Sachs in the largest single venture investment into a Hawai'i technology company.

"Hawai'i got a lot of good coverage when that happened," said Ann Chung, executive director of the Hawai'i Technology Trade Association. "The fact they were able to raise so much money was a real positive for the industry here."

Pihana spent much of its money building a data center network in Los Angeles, Sydney, Tokyo, Seoul, Singapore and Honolulu, counting on increasing demand for data storage, Internet services and secure server sites. While the 160-employee company's Honolulu offices controlled central administrative tasks, other important functions were spread around its Pacific sites.

Pihana's Honolulu employee count peaked above 80 last year. But sales sagged as the telecommunications industry tumbled through 2001, and the company laid off a few dozen workers after the Sept. 11 terrorist attacks.

Okahara said the merger makes Pihana part of a stronger company.

"A larger entity with more coverage gives you more synergy," he said. "If you're going it alone, you may have the money to run your business but you have to do everything yourself. With this merger we'll have more assets."