A semi-trailer transports an ATCO modular unit from the Calgary warehouse on Wednesday. (CBC)

About 400 people are out of work after Calgary-based ATCO Structures lost a contract to build a work camp for an oilsands mine north of Fort McMurray.

The contract to design, manufacture and install the camp for the Fort Hills Energy Limited Partnership project has been cancelled, the company said Tuesday.

"It was a 2,000-man camp and we had completed four dorms, 504 rooms. Petro-Canada announced the deferral of their Fort Hills project and advised us at this time, after the four dorms, we should stop," said Harry Wilmot, president and chief operating officer of ATCO Structures.

"Now we've got about two more weeks to finish this phase of it. It was a hard decision for us to make but we have given the plant workers notice to layoff because of this."

All 400 workers are based in Calgary, Wilmot told CBC News.

"With the recent reduction and current economic conditions, we had to make a business decision and it was a hard decision for us to make," he said.

Last month, the Fort Hills partnership, which includes Petro-Canada, Teck Cominco Ltd. and UTS Energy Corp., delayed a decision on the oilsands mine "until a cost estimate consistent with the current market environment [could] be established."

A decision is expected in the spring.