AGE Concern in Darlington may be forced to make job cuts in an attempt to save money, a spokesman has admitted.
But rumours that the service is due to close amid a financial crisis have been quashed.
Age Concern employs 30 people, as well as 70 volunteers, at its base in Bradbury House, in Beaumont Street, where it provides day care, a bathing service, advice, information and insurance, as well as a restaurant.
The charity had planned to create a walk-in information and advice shop in Clarkes Yard, but this has been put on hold until its financial situation is clearer.
Glen Reynolds, media and development officer, said yesterday the charity had been successful in having a tender to provide a day service for elderly people renewed by the borough council.
But he said more and more charities were bidding for the same amount of funding.
He ruled out rumours that the organisation's problems may force it to close. He said: "It is very important our staff and customers are fully informed on this. We are not closing, there may have to be some reorganisation.
"We are not saying that we will be making redundancies at this stage, but there is a possibility and we are consulting with staff."
He added: "Those members of staff who are vulnerable to redundancy have already been told of the situation."
"Some services just are not financially viable in a climate where along with many other charities, in terms of grants, we are trying to get a slice of the same, small cake," he said.
Jim Johnson, 84, of Darlington, heard the rumours when he called into Age Concern in Bradbury House, Beaumont Street.
He said: "I'm really worried about it because we went in this morning and everyone was telling me they are closing down.
"I go three times a week. It is somewhere to go for you when you get to my age. I've been going there for six years, since it opened, and I would be really upset if it closed down."
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