Reid said he felt his association with job cuts would hold back the charity, which comprises Sheffield Youth Service and the city's careers guidance service.
Sheffield Futures, which Reid set up in 2002, is contracted to provide services to Connexions South Yorkshire.
Up to 35 jobs were under threat when Sheffield Futures faced an increase of 7.3 per cent in pension contributions in February (YPN, 10-16 March, p6).
Six employees lost their jobs in March after protracted negotiations with Unison.
Reid will be replaced by interim chief executive, John Lambert, who has worked with Sheffield Connexions and the Government Office for the East of England.
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