PIKETON (AP) — Ohio officials are criticizing an announcement by the government to halt a southern Ohio uranium enrichment project in favor of similar work being done in Tennessee.

The U.S. Department of Energy said Friday it will end its contract for the American Centrifuge Project in Piketon at the end of the month. A statement from the Energy Department and the National Nuclear Security Administration says the project’s 120 centrifuges provided valuable data on centrifuge technology but a facility in Oak Ridge, Tennessee, shows more promise.

“We have concluded that continued support from the federal government for additional data from Piketon operations has limited remaining value,” the statement said.

The move affects about 235 employees at the site, according to Centrus Energy, the operator of the plant.

The news follows a warning from a company decontaminating and cleaning up the plant that a federal budget gap could mean more than 500 layoffs among its own employees, affiliated personnel and subcontractors.

Those layoffs could occur around Oct. 22, but the project’s director and other leaders remain hopeful they’ll get funding needed to continue their current pace, which costs roughly $387 million annually, according to Fluor-BWXT Portsmouth, the main clean-up contractor.

The Portsmouth Gaseous Diffusion Plant in Piketon produced enriched uranium for defense and commercial uses until 2001. Its shutdown left behind chemicals and radioactive areas to be addressed and huge buildings to be demolished — work that is taking decades and employs about 1,800 people in a pocket of high unemployment.

U.S. Sen. Rob Portman, a Cincinnati Republican, called the news a blow to Piketon and southeastern Ohio and another broken promise by the administration of President Barack Obama to support the site.

U.S. Rep. Tim Ryan, a Youngstown Democrat, said the decision was disappointing.

“I will continue to work with the Ohio business community to do everything in our power to ensure that the Piketon facility can continue to do its important work and transition to operate commercially,” Ryan said.