Chattanooga's Alstom plant announced is cutting 80 positions due to a decline in demand for new or refurbished nuclear power plants.
Officials said a number of market factors, including the Fukushima disaster in Japan and the growing availability of shale gas in the U.S., have dampened the nuclear power outlook.
The reduction in workforce does not affect employees in the boiler and services operations.
The factory will focus on providinge machining, assembly and balancing operations related to the retrofit of steam turbines for existing nuclear and coal fired plants and the manufacturing of equipment for natural gas-fired power plants.
The entire industrial capacity in Chattanooga will be preserved to enable return to operations should there be a revival of the market.
Alsom will offer affected employees a severance package, out-placement assistance and other support, officials said.