John Deere & Co., the world’s largest agricultural equipment manufacturer, plans to cut hundreds of production positions by the end of next month because of challenging market conditions.
The company confirmed the sweeping job cuts in an emailed statement to NTD on July 1, saying nearly 600 production jobs in total are being slashed across three locations in the Midwest.
These jobs include roughly 280 positions at its home plant in Moline, said the Illinois-based equipment manufacturer. In addition, a combined 310 workers will be let go at two separate factories in Iowa—about 210 employees at a plant in Davenport and 100 in Dubuque.
All upcoming job cuts are said to be effective from Aug. 30, the company told NTD.
“These changes are being made due to reduced demand for the products produced at these facilities,” Deere stated. “To better position Deere to meet future demand, we continue to take proactive steps to reduce production and inventory.”
Laid-off workers will receive Supplemental Unemployment Benefits (SUB), which will cover about 95 percent of their weekly net pay for up to 26 weeks, depending on the number of their years of service, the company said. Workers will also be given job-placement assistance, healthcare benefits, and tuition reimbursement, among other benefits.
Meanwhile, the decision comes weeks after the company announced plans to move some operations from one of its Iowa facilities to Mexico by the end of 2026.
Deere, which was founded in 1837 and is one of America’s oldest companies, said in June that it was in the process of acquiring land in Ramos to build a new factory, noting it will move the manufacturing of skid steer and track loaders from its Dubuque facility to Mexico.
In Monday’s statement, Deere said about 2,200 employees are remaining at its home plant in Moline, with about 1,700 production and maintenance jobs. A combined 4,100 workers are remaining at the two Iowa factories.
Falling Crop Prices Add to Farm Stress
According to the company’s second-quarter earnings report released on May 16, the farm equipment manufacturer saw a 12 percent decrease in global net sales and revenues.The company generated a net income of $2.37 billion profit, down from $2.86 billion in the same period the previous year, and lowered its full-year 2024 profit forecast for a second time as farmers continued to buy fewer tractors and other equipment owing to declining prices for their crops.
Deere chairman and chief executive John May said they expect sales to decline further in the second half of fiscal 2024, pointing out that company officers are proactively reducing production and inventory levels “to adapt to demand changes and position the business for the future.”
“Despite market conditions, we are committed to our strategy and are actively investing in and deploying innovative technologies, products, and solutions to ensure our customers’ success,” Mr. May said.
Deere shares slipped 1.6 percent in morning trading and are down about 7.5 percent since the beginning of 2024.
The layoffs also come as the U.S. Department of Agriculture (USDA) forecasted net farm income would slide 25.5 percent, to $116.1 billion, this year from 2023.
Adjusting for inflation, net farm income is expected to be down 27.1 percent this year as farmers contend with lower prices for soybeans and corn.
The USDA said that lower direct government payments and increased production costs are also weighing on farmers.
