Jan. 4—Hundreds of contract workers found themselves out of work earlier than expected when the company that hired them was terminated from a project at the EVRAZ steel mill in Pueblo.

Wanzek Construction laid off 666 employees after Palmer North America, a steel manufacturing company, canceled its contract with the North Dakota-based construction firm. The Colorado Department of Labor and Employment notified Pueblo Mayor Nick Gradisar and the Board of County Commissioners of the termination in a letter on Tuesday.

The employees, who were not unionized, were let go "based on the unforeseeable cancellation of Wanzek's contract to perform project work at that site," according to the letter.

The letter did not specify how many of the workers were hired in Pueblo and how many were brought in by Wanzek.

"We would have liked to have given you more advance notice of this action but were unable to do so due to these circumstances caused (by) the unexpected cancellation," the letter read.

The mass layoff comes on the heels of a Dec. 21, 2022 lawsuit filed by Palmer North America against Wanzek and its parent company, MasTec, Inc. The lawsuit alleges that Wanzek failed to hold up its end of a contract — valued at more than $300 million — to work on a project at the Pueblo EVRAZ site.

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Palmer North America, which is seeking damages in excess of $130 million, alleges that Wanzek neglected to provide "competent personnel and workers," repeatedly submitted incomplete and insufficient work schedules, and failed to comply with established safety protocols, resulting in "multiple serious on-site incidents" including at least one injury, according to a copy of the lawsuit. The construction company's lack of general competence led to several delays in the project, according to Palmer North America.

MasTec, Wanzek's parent company, is named in the lawsuit because the Florida-based firm "personally guaranteed" that Wanzek was up to the job, according to lawsuit documents.

Wanzek has filed a countersuit, in which the company denies most of the allegations, accuses Palmer of breaching the contract, and requests to be paid upwards of $75,000 in damages.

In its letter to Gradisar and the county commissioners, CDLE said Wanzek hired the contract employees specifically for the EVRAZ project and understood that their employment would be terminated once the project was done. The "unforeseeable cancellation" of the contract led to the mass layoff, the state labor agency said.

Representatives from Palmer North America and Wanzek Construction did not immediately respond to requests for comment.

Gazette business reporter Jessica Van Dyne contributed to this story.