Nearly 1,300 employees of Austin-based Southwest Key Programs will lose their jobs in early October after the federal government ended the nonprofit’s refugee housing contracts amid a long-running abuse scandal. Southwest Key, the largest U.S. operator of shelters for unaccompanied migrant children, had been accused in a now-dropped 2024 Justice Department lawsuit of widespread s-xual abuse at its facilities between 2015 and 2023. Although the case was unexpectedly dismissed in March, the U.S. Department of Health and Human Services had already moved all children out of its shelters and pledged to end its contracts. The layoffs, confirmed through mass notices filed with the Texas Workforce Commission on July 31 and August 6, will hit facilities in Austin, El Paso, Los Fresnos, San Benito, Canutillo, McAllen, Weslaco, Channelview, and multiple locations in Houston and Brownsville. Founded in 1987, Southwest Key provides youth and family services, juvenile justice programs, and workforce development, but its shelter operations for migrant children were its most high-profile — and controversial — function. The nonprofit says it is working with federal partners to ensure an orderly transition and praised its staff for their professionalism and compassion.