East Timor has fired about a quarter of its army. That's only about 400 troops. The men were dismissed after they staged a mutiny to protest what they believed was unfair treatment (living conditions and how promotions are given out). The mutineers originally appealed to the president of East Timor last month, who agreed with the soldiers and told them he would make things right. But when the troops did not then return to duty, they were dismissed from the army. Recently, another 200 troops have gone on strike, in sympathy with the dismissed troops.
The troops in question were former rebels against Indonesian rule of East Timor. It is often the case that, when a rebellion is won, many former rebels are incorporated into the armed forces. There are often problems with this, as the former rebels frequently have trouble adapting to the more predictable life of a professional soldier. The only solution is usually dismissing the troops who cannot adjust, or tolerating undisciplined, ineffective, and sometimes criminal, troops. While dismissal risks seeing some of the former rebels/soldiers turning into bandits, it is considered less risky than keeping them in the armed forces. The East Timor army was formed six years ago, and has had lots of training from peacekeeper instructors. But the country is poor, and pay and benefits for the troops are not all that great.