Struggling with falling demand for farm equipment, Deere & Co. announces nearly 600 layoffs
Struggling with falling demand for farm equipment, Deere & Co. announces nearly 600 layoffs
Deere is laying off nearly 600 workers as the farm equipment manufacturer deals with declining demand
ByMATT OTT AP business writer
July 1, 2024, 11:00 AM
Deere & Co. is laying off nearly 600 workers as the farm equipment manufacturer deals with declining demand.
Deere confirmed Monday that the production positions being cut are concentrated at two factories in Iowa and one at its home base in Moline, Illinois, where 280 employees will be laid off effective Aug. 30. A combined 310 workers will be let go at the Iowa locations.
In its second-quarter earnings release in May, Deere reported a more than 15% decline in revenue, the third straight quarter of year-over-year sales declines. Company executives said at the time that they expected further sales declines in the second half of the fiscal year and said it would continue to “take proactive steps to reduce production and inventory.”
Deere & Co. turned in a quarterly profit of $2.37 billion, 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 due to declining prices for their crops.
The U.S. Department of Agriculture anticipates that 2024 net farm income, which is a broad measure of profits, will total $116.1 billion. That’s down 25.5% from a year earlier. Adjusting for inflation, net farm income is expected to be down 27.1% 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.
The most recent layoffs amount to about 14% of the more than 4,000 production and maintenance jobs at the three facilities. Deere employs more than 80,000 people worldwide.
Deere shares slipped 1.6% in morning trading and are down about 7.5% since the beginning of 2024.
Early in June, Deere announced that it was moving its skid steer and track loader manufacturing from a facility in Dubuque, Iowa to Mexico by the end of 2026. The company said that it was in the process of acquiring land in Ramos, Mexico to build a new factory.
At the same time, Deere informed some workers at its seeding and cylinder operations in Moline that over 120 production employees would be placed on indefinite layoff effective June 28.