Urban Alchemy lays off over 100 people after city homeless shelter contract ended

AUSTIN, Texas - Urban Alchemy has laid off over 100 workers following the end of its contract with the city of Austin to run two downtown homeless shelters.

What we know:

According to a WARN notice with the Texas Workforce Commission, Urban Alchemy laid off 55 workers at the Austin Resource Center for the Homeless (ARCH) and 54 workers at the 8th Street Women's Shelter, formerly the Salvation Army shelter, on Sept. 30.

An employee told FOX 7 Austin back in mid-September that he had received a notice from Urban Alchemy about the layoffs on Sept. 17.

The backstory:

The layoffs come after the city of Austin declined last month to renew its contracts with the California-based nonprofit.

The Homeless Strategy Office says Urban Alchemy reported five of their own employees for changing the data that tracks how people experiencing homelessness move through the system.

"When that type of data is changed, it could make a shelter look more efficient than it actually is. That's a major issue for us. And it's obviously a major issue for the public. If the data is not accurate, and that's the reason why we've decided to transition this contract to another operator," said David Gray, director of the Austin Homeless Strategies and Operations Department, in September.

Urban Alchemy had been brought in by the city to help get the ARCH back online and clean up the surrounding area, according to Gray. The nonprofit later opened the 8th Street Women's Shelter after the Salvation Army closed its downtown shelter.

In mid-September, the city told FOX 7 Austin that it was finalizing an emergency contract with Endeavors—a nonprofit that already operates other shelters in Austin. Endeavors was set to take over the shelters on Wednesday, Oct. 1.

The city said at the time the three organizations were formalizing the next steps, and those who were not implicated in any wrongdoing will have an opportunity to reapply for their positions.