The Department of Social Services says it will do what it can to ensure the continued employment of Manx Family Services staff.
Since 1999 M.F.S has provided residential and outreach care for government, but all contractual arrangements have been terminated following the findings of the Bordesley Institute.
Concerns about M.F.S's management and practice were raised in October last year during the Commission of Inquiry into the Care of Young people.
Existing services will be taken over by St Christopher's Fellowship.
In a media statement Social Services says as far as it's possible they will seek to ensure the continued employment for the staff by a new provider.
M.F.S owns or leases 12 units around the Island, and Social Services Minister, Steve Rodan, says they are also the subject of negotiations.
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