Despite big raises and contracts, a tech training giant lays off staffers and loses its CEO

When he joined a major local workforce development company nearly two years ago, Matt Derella was adamant that it wasn’t abandoning its Baltimore roots.

“I’m sure some readers will say, ‘Is he really going to make Baltimore still an important part of what Catalyte is?’” Derella told Technical.ly back when he became Catalyte’s new CEO, while he was living in New York City. “All I can say is: We’re going to be doubling down on Baltimore and building out the community. We want to be a company that the people of Baltimore and the greater region in Maryland are really proud of, for what we’re doing.”

Now, after a series of major raises, contracts and acquisitions that consolidated the Otterbein-based company’s reputation as a premier provider of tech workforce training and advisory services across the country, Derella is out of Catalyte. So are an untold number of other employees in a round of layoffs confirmed by current leadership and some of those impacted.

“Unfortunately, we had to lay off some of our workforce. We constantly assess where we want to go as a company and continue to align our staff accordingly,” said Curt Schwab, president of Catalyte’s OnDemand service for employers seeking tech talent, in an email. “This does not impact our ability to serve our clients, and we remain fully committed to our vision of pairing best-in-class talent with leading companies.”

Schwab declined to specify the size of the layoff round, its department or geographic distribution, the occurrence of any prior layoffs in the past few years or reasons for this round of terminations. He also declined to “comment on any specific impacted employees.”

He did note that the company had been working with Derella, a chief customer officer at Twitter for almost a decade before leading Catalyte, on his exit prior to any public announcement. Derella made this declaration on Tuesday in a LinkedIn post that praised new leadership’s plans to further the company’s goals of connecting tech workforce needs to people from underresourced groups.

“As I step back from the CEO role, I’m thrilled to see the company move forward with a leadership team who will steer Catalyte into the next phase of growth, continuing our mission to break down historical barriers to unlock economic opportunity for people who have the aptitude to work in the technology space but may not have access to the skills and opportunities,” he wrote.

Derella’s post did not specify his next plans, but did reference his service on Catalyte’s board before becoming CEO. He did not immediately return Technical.ly’s request for clarity on his departure or any reasons or metrics for the latest layoffs.

Catalyte, which was founded in 2000, imposed these layoffs despite several years of public successes under both Derella and Jacob Hsu, the company’s former CEO who also serves on its board. These benchmarks include, but are not limited to:

• A partnership with several City of Baltimore agencies and organizations to create a training pipeline for local government software jobs
• A $15 million contract to develop tech talent for the State of Maryland
• Over $3 million in Series A funds, as well as top placement in PitchBook’s list of the Baltimore region’s biggest raises in Q3 2023 
• Several acquisitions of other companies and platforms, as well as new geographic hubs in cities like Denver (Schwab said the company no longer maintains these hubs) 
• Media spotlights from “60 Minutes” and “Roadtrip Nation” 

Schwab said that none of the staff changes hurt Catalyte’s “ability to serve our clients,” which, according to its website, have included Nike, Koch Industries and Coors Molson. 

The exact size of Catalyte’s latest layoffs remains unclear. The most recent Worker Adjustment and Retraining Notification (WARN) Act logs for Maryland and Illinois, where a Securities and Exchange Commission filing listed Catalyte’s corporate registration, didn’t list the company. 

But several former Catalyte employees attested to being laid off in this round. Philip Tryon, an Austin-based account specialist on the company’s Talent Stream team, posted on LinkedIn about two weeks ago that he was “part of a layoff;” he also said in his page bio that his position ended “due to company-wide layoffs.” 

Communications director Adam Curtis told Technical.ly he was laid off in early October, too, after eight years with the company. He said he didn’t know of any layoff plans until he heard about his own. He said he didn’t get the sense the layoffs were affecting certain teams more than others, though he had a limited vantage point. 

“You can guess that was kept, I assume, pretty much under wraps,” he said of the latest layoff round. 

Former chief strategy officer Eliot Pearson said he didn’t see more than five to 10 layoffs during his roughly three years at Catalyte. He amicably left the company in 2022, after the company made some pandemic-era pivots from the in-house product he was working on to a different, more acquisition-based strategy. He pointed to Catalyte’s July announcement about new AI advisory services and thought that this more recent pivot might’ve impacted the company’s current position.

Pearson also noted that some of Catalyte’s strengths — especially its unique approach to tech training services — might’ve impeded it. 

“Catalyte, it was so ahead of its time, and it still is in how it works,” Pearson said. “But effectively, you have a product that people aren’t necessarily used to buying. … You have to culturally change people’s mindset, and that’s what you’re trying to sell as a service. So it’s a fascinating problem, but it’s tough.”