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Bak USA cites 'competitive' pressures in terminating 15 workers

Bak USA, the fast-growing Buffalo mobile computer maker with a social focus, has terminated 15 employees in recent days, the company confirmed Wednesday.

Six of the employees worked on producing and filling orders for the company's tablets, and nine worked on the administrative side, according to Bak USA spokeswoman Samantha Pierce.

She said four employees, all in administration, were let go because the company decided to eliminate those positions. The other 11 workers were terminated because they failed to live up to the company's expectations.

Bak USA is seeking replacements for some of those 11 workers, Pierce said.

"We do our best to help employees be successful here, but we’re also running a business and we need to invest in our resources, including our people, wisely," Pierce said in a statement. "This was not a decision that we took lightly. However, it enables us to be more competitive and make room for the best and the brightest employees who can innovate, inspire and grow with us."

The company said it is financially sound and it has experienced year-over-year growth since its founding in 2015. Bak USA said it has seen a 300 percent increase in devices shipped year to date, and the company pointed to its recent win of a $2 million contract to deliver 4,000 rugged tablets to the One WaSH National Programme in Ethiopia.

"With that said, we’re competing in a competitive global marketplace – against giants like Dell and Lenovo – and we have set aggressive goals to help us capture some of that market share. That means each and every employee must perform at a high level and be accountable to the results," Pierce said.

The company informed the 15 employees of the terminations last Thursday and Friday and on Monday. The eliminated positions include the chief financial officer, a production manager and a production coordinator.

The moves leave Bak USA with 113 employees, including 41 technicians.

Bak USA in January celebrated the hiring of its 100th worker, finally meeting the employment goal the company had pledged to reach by the end of 2015.

The company, based at McGuire Development Co.’s Compass East building on Michigan Avenue, opened to fanfare nearly 3½ years ago.

Founders J.P. and Ulla Bak set up shop in Buffalo after gaining admission to the state's Start-Up NY program, which allows new companies that work with the state's universities and colleges to operate virtually tax-free for a decade. Bak USA has promised to hire 267 workers by the end of next year.

The company had invested $22 million in its facility as of early last year.

The Danish-born founders have said they wanted to do well, and do good, with their business, which makes affordable tablet and laptop computers for the domestic and international markets.

It is one of the few companies – if not the only one – manufacturing computers in the United States. The company, billed as a social enterprise, has made a point to hire immigrants and refugees for its production positions here in Buffalo.

Dating to 2015, the company has received three investments totaling $30 million from B. Thomas Golisano, the billionaire founder of PayChex and former Buffalo Sabres owner. Golisano joined Bak USA's board and as of last fall owned more than 50 percent of the company.

David Robinson: Why Golisano's latest investment in Bak USA is a turning point

Bak USA in 2016 signed a partnership with Microsoft. The company serves an original equipment manufacturer for Microsoft and creates devices around its Windows platform.

That was a shift from the company's original production of low-cost devices that worked on the Android platform and that were aimed primarily at customers in developing countries.

But the deal with Microsoft allows Bak USA to target business-to-business sales opportunities in this country, including to school systems. In addition, some products are sold in Microsoft retail stores.

J.P. Bak said last September that annual sales had reached $5 million and that he expected the company to be profitable in 2018.

"The company is in a growth and diversification phase," Pierce said Wednesday.






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