Over 450 Employees Affected by Insolvency of German Red Cross

Niedersachsen - The German Red Cross (DRK) Braunschweig-Salzgitter district has officially filed for insolvency, jeopardizing more than 450 jobs in the region. The organization cited financial difficulties stemming from the COVID-19 pandemic, coupled with rising energy and personnel costs, as the primary reasons for this unfortunate development.

Additionally, the two subsidiary companies, 'Pflege und Betreuung' and 'Sprungbrett,' are also facing the repercussions of this insolvency. The Braunschweig District Court mandated the insolvency proceedings on June 18, allowing the organization to manage its affairs under self-administration.

Founded in 1948, the DRK Braunschweig-Salzgitter has been operational for nearly 80 years, providing a wide range of services, including counseling and youth centers, daycare facilities, nursing homes, and two emergency medical stations. According to its own estimates, the organization generates an annual revenue of approximately 20 million euros.

The financial troubles that led to the insolvency have been unfolding since 2023, when a nursing home under the organization had to close its doors. In an effort to avert insolvency, the sale of a significant property was anticipated, but unexpected delays in the transaction ultimately necessitated the filing for insolvency.

As the process unfolds, the DRK is permitted to continue its operations while under the oversight of an administrator, which enables the organization to pursue a self-directed restructuring without external intervention. The current management team will remain in place and actively participate in the recovery efforts.

Despite the challenging circumstances, the DRK Braunschweig-Salzgitter intends to maintain its usual business operations for the time being, with the goal of achieving financial stabilization. A recovery plan is reportedly already in development.

In the interim, the affected employees are receiving insolvency benefits through the employment agency, which provides some financial support during this period of uncertainty. Nico Seefeldt Kazazi, a board member of the organization, expressed optimism about the future, indicating a commitment to remain operational and a belief in the potential for a successful recovery.