Tennessee defense contractor EOD Technology announces layoffs

Josh Flory knoxnews.com

Lenoir City defense contractor EOD Technology said Tuesday it is laying off 48 headquarters employees.

In a news release, the company said it was restructuring its business model in response to federal budget cuts, especially those associated with its work in Iraq and Afghanistan.

The release said several government contracts to protect U.S. troops and manage explosive ordnance were expected to extend well into 2012, but have ended earlier than expected because of accelerated U.S. troop withdrawal plans. Following the layoffs, EODT will have 250 American employees and 3,000 foreign nationals. The company said employees who are laid off will be offered severance packages.

"Our employees are remarkable, highly skilled people who are part of protecting the lives of American troops and foreign nationals," Matt Kaye, EODT's CEO, said in the release. "As any organization that works with government understands, we recognize that the budget environment is always changing, sometimes unexpectedly. Unfortunately, we must take this action, as many companies have been forced to do, to remain competitive."

The company said it is boosting its emphasis on land mine removal and disposal, and expanding its work with the oil and gas industry.

The last couple of years have been turbulent ones for EODT. In December, 2010, federal agents targeted the company with a raid at its facilities in Lenoir City and Roane County, removing paperwork and escorting occupants of the buildings to their vehicles.

The same week, a government official indicated the raid was related to EOD Technology's work in Iraq. Stuart Bowen, the government's special inspector general for Iraq reconstruction, said the Army's criminal investigation division had helped put the case together and that his agency also works closely with the Defense Criminal Investigative Service.

At the time, Bowen said "This is not the first, and it won't be the last, time that we work with those agencies as well as (Immigration and Customs Enforcement) to hold accountable those who have taken advantage of the chaotic situation in Iraq for their criminal, personal benefit."

EODT's attorney in October said the company would be cooperative and forthcoming, and remained confident the government would find EODT meets its compliance obligations and is a responsible contractor.

Founded in 1987, EODT initially specialized in explosive ordinance disposal but later branched out into other areas and became one of the leading private security contractors for the U.S. government. In 2010, a U.S. Senate committee criticized EODT for its hiring practices in Afghanistan, and the following year it was revealed that the State Department had fired the company from a contract to guard the U.S. Embassy in Kabul, Afghanistan.

A year ago, the company said it had laid off 31 employees in Lenoir City, four in Northern Virginia and more than 100 to be deployed in Afghanistan.