The Employment Agency says the system is deeply flawed and should never have been introduced in the first place.
“From what we understand, there have even been attempts to recruit people to violent militant groups and that is of course completely unacceptable when we’re using tax money to achieve good labour market establishment in this country,” the Employment Agency’s secretary general, Mikael Sjöberg, told Swedish Television News.
“We have so many deep problems in the system that we cannot guarantee quality and security,” Sjöberg added.
The decision comes after Swedish Television aired an investigative programme about the system.
In a statement, the Agency said that all contracts with suppliers have been terminated, but that anyone using companies’ services today will still have access to it for three more months.
The system was introduced by the previous centre-right coalition government in 2010 with the purpose of helping newly arrived migrants get jobs quickly. At the time, it was described as “the largest reform of Swedish integration policy in decades”.