The jihadists "came around" on three separate occasions and warned the men to stop the work which the group saw as a threat, said resident Bukar Maduye.
Gunmen believed to be from the Islamic State West Africa Province (ISWAP) have killed 11 casual workers of a telecom firm in Borno state.
The killing on Tuesday has not been confirmed by Nigeria’s military.
But the AFP, quoting the civilian Joint Task Force and some residents reported that the ISWAP fighters opened fire on the workers as they were laying telecom fibre optic cables in Wajirko village, 150 kilometres (93 miles) outside Borno state capital Maiduguri, they said.
“The insurgents came in the morning and opened fire on the workers, killing 11 and injuring many,” militia leader Mustapha Karimbe said.
“The attackers had warned the labourers to stop working on laying the cables but they ignored the warning because they needed money to feed their families,” Karimbe said from the town of Biu, 50 km away.
Those injured were taken to a hospital in the nearby town of Damboa, he said.
The jihadists “came around” on three separate occasions and warned the men to stop the work which the group saw as a threat, said resident Bukar Maduye.
“Our people are starving and the laying of the cables provides some of us a good source of income which was why we ignored the warning,” said Maduye, who gave the same toll.
ISWAP is known to have a strong presence in Wajirko and neighbouring areas although it is close to Sambisa forest, the major enclave of rival Boko Haram jihadists.
The IS-supported jihadists have carried out several attacks targeting Nigerian troops in the area.
In April, the militants looted and burnt a military base in Wajirko, after fierce fighting with soldiers who were forced to withdraw.
Since then, troops have abandoned the base and the village was left without protection save snap military patrols which are prone to jihadist attacks.
In June, three soldiers were killed in an ISWAP ambush on a military patrol near the village.
ISWAP split from Boko Haram in 2016 over ideological differences and the latter’s indiscriminate attacks on civilians. ISWAP focuses its attacks on military targets.
However, the group has in recent months been accused of raiding villages and looting food supplies. The killing of the construction workers could be the group’s first such attack on civilians and it was unclear if it was an isolated case or a shift in tactics.