SEALY, TX --What will happen to the town of Sealy now that hundreds of people will soon be out of a job there? The crisis has been many months in the making. It started when BAE Systems in Sealy lost its contract to make trucks for the Army. It was just a matter of time. Folks haven't been told yet who will be let go, but the layoffs are coming -- 600 contractors next month and another 500 to 700 BAE employees by the end of the year. For 17 years, BAE Systems has made armored vehicles for the U.S. Army. It's the largest employer in Sealy and Austin County, but it will soon cut its workforce nearly in half. "The decision to reduce the workforce was an extremely difficult decision, however it was necessary in order to continue operations and remain viable in a highly competitive business climate," said Davy Kong of BAE Systems. The company says the cuts became necessary because the Army awarded the $3 billion medium tactical vehicles contract last year to a Wisconsin company. The government claims moving the operation will mean a significant savings for them. "We remain committed to our employees during this difficult time of transition," Kong said. BAE is offering severance pay, benefits and job placement services to workers, but folks here are worried about what the future holds. "I don't think there's 1,300 jobs out there to employ all those people. So what are they gonna do and where are they gonna go?" wondered resident John Hillhouse. On the outskirts of Sealy at Tony's Diner, a relaxing meal gets serious the moment you say the letters BAE. "It's gonna hurt everybody in this town. It really was a big pull at BAE," said Henry Jurek of Tony's. The talk on Thursday focused much on the layoffs that most for months figured inevitable. They're just not sure what to make of them now that it's official. Jurek has worked at Tony's for 40 years and he dreads seeing his customers and his friends dealing with this. "They don't know where to turn, what to do, no jobs. They just don't know what to do, you know," Jurek said. BAE employees we spoke to say they've been instructed not to talk about the impending layoffs. The company says those who are being terminated will receive a letter in the mail on Monday.