Multiverse, a high-profile U.K.-based training company, says it’s hitting pause on federally registered apprenticeship programs in the U.S.
The privately held company launched its U.S. operation in New York City in January 2021, and shortly thereafter became Britain’s first ed-tech unicorn with big ambitions for apprenticeships on this side of the pond.
“We’re building an outstanding alternative to both the college system and to traditional corporate training,” Euan Blair, Multiverse’s co-founder and CEO, said as the apprenticeship intermediary arrived in the U.S.
The company focuses on apprentices from underserved backgrounds, who get free training, support, and salaries. It has trained more than 16K apprentices for technology roles with employer partners that include Microsoft, Citi, Google, and Morgan Stanley. Multiverse handles the significant red tape of registering the programs with the U.S. Department of Labor while charging corporate partners for the recruitment and training of apprentices.
Interest in apprenticeships has been rising in this country, with bipartisan support from state and federal lawmakers. The rapidly growing startup’s arrival was widely seen as a boon to the concept of apprenticeship here, and Blair’s big name didn’t hurt.
Yet Multiverse’s U.S. operation hasn’t grown fast enough to support its footprint. The company lost $50M last year and generated unflattering headlines. More layoffs have followed, and a spokesman says Multiverse has decided to withdraw temporarily from registered apprenticeships.
The company will honor its commitments to U.S. apprentices and employer partners and will focus on the platform’s upskilling offerings in this country, with tech training programs for cohorts of workers at businesses.
“What we heard from employers was a need for training that can be deployed rapidly, can adapt to the ever-changing technology landscape, and can deliver immediate results,” says Tim Smith, Multiverse’s vice president of corporate affairs.
“Ultimately that requires a level of flexibility in duration and content that isn’t fundamental to U.S. registered apprenticeships,” he says.
While the decision appears to be driven mostly by investment pressure and Multiverse’s evolving business model, the relative lack of public funding for apprenticeships and substantial bureaucratic hurdles of the registered system haven’t helped. (Those rules may soon get more complex.)
The balance between incentives and regulation in the U.S. needs to be right, says Smith.
The Kicker: “We carried almost the entire burden of registration for our employer partners, but more than half chose not to engage with the formal registration process, as the reasons for doing so weren’t obvious,” he says.
More Stick Than Carrot
It’s safe to say that U.S. policymakers have failed to fork over the money to match their rhetoric about apprenticeship.
The White House last week announced $244M in awards to to help modernize, diversify, and expand the registered apprenticeship system. The funding is the largest combined federal investment in the learn-and-earn model, according to the Labor Department. The grants prioritize education, care, clean energy, IT, supply chain, and other in-demand industries.
Yet that money is of course a drop in the bucket compared to the $500B or so in annual public funding for traditional higher education, as investor and apprenticeship backer Ryan Craig notes in his recent book. Likewise, congressional Republicans last week advanced a budget proposal that would go the other direction, with only $150M for registered apprenticeships.
“Without public funding, it becomes a pet project of a CEO,” says Craig, managing director at Achieve Partners. “When budgets tighten, the CFO cuts it.”
Indeed, while apprenticeships grew during the last fiscal year, hitting a new high of 646K active apprentices, a Work Shift analysis found an overall growth rate of 6%, which is well short of the scale policymakers say they want. And the number of tech apprenticeships shrank, with a 3% overall decline and a whopping 28% drop in new apprentices.
Inflection Point? The departure of a company that has provided “scalable plug-and-play options for high-demand occupations” highlights the fact that the U.S. apprenticeship system is at an inflection point, says Myriam Sullivan, interim vice president of the Center for Apprenticeship and Work-Based Learning at Jobs for the Future.
“For employers and training providers, costs associated with apprenticeship have grown,” she says. “This signals a need to systematically address financial barriers within the system.”
John Colborn is executive director of Apprenticeships for America, a nonprofit created in 2022. He remains hopeful that the U.S. is on the cusp of significant investments in apprenticeship. “Until then, the economics are dicey,” Colborn says. “Our market is still a developing market.”
Not much new public money would be needed for sustainability, he says, along with some fine-tuning of current funding streams. Colborn notes that Congress opened the door to a needed shift with its March spending bill by directing the Labor Department to assess the feasibility of performance-based funding for the registered system.
Craig argues that the key to developing earn-and-learn programs is by paying intermediaries based on the number of apprentices they support and place rather than “trying to pick winners” with spotty grant funding. California recently became the first state to move this way.
Meanwhile, bipartisan interest in apprenticeship remains, experts say. And the newly announced federal grants include programs that feature a strong role for intermediaries. For example, OpenClassrooms is a partner of the University of Maryland Global Campus for $3.9M in apprenticeship funds it will receive in the latest batch of Labor Department awards.
“We’re in a good place and well positioned,” says Jeremy Durand, senior vice president of international sales and operations for OpenClassrooms, an apprenticeship intermediary headquartered in Paris. “I don’t think there’s a lack of funding, at least to reach scale.”
Multiverse says it remains all in on equitable access to opportunity that’s delivered through applied learning, for now via upskilling in the U.S. Advances in AI give the company the “ability to deliver more by creating personalized experiences for every individual,” says Smith, “which will better meet the needs for employers, but also the aspirations of learners.”
Other companies will pick up the slack on apprenticeships, says Craig. And he says if policy and funding get sorted out in this country, “Multiverse will be back.”