Major Iowa Company Reducing Workforce Amid Financial Woes; 600 Workers to Lose Job
Deere & Co. is reducing its workforce by almost 600 employees due to a decrease in demand for its farm equipment.
On July 1, Deere announced that it would be reducing its production positions at two factories in Iowa and one at its home base in Moline. Unfortunately, this means that 280 employees will be laid off, with the effective date of August 30. Approximately 310 employees will be laid off at the Iowa locations.
Deere’s second-quarter earnings release in May revealed a significant drop in revenue, marking the third consecutive quarter of sales declines compared to the previous year.
During the announcement, company executives expressed their anticipation of additional sales declines in the second half of the fiscal year. They also emphasized their commitment to taking proactive measures to minimize production and inventory.
Deere & Co. reported a quarterly profit of $2.37 billion, which is lower than the $2.86 billion earned in the same period last year. Additionally, the company has revised its full-year 2024 profit forecast for the second time. This adjustment comes as farmers are purchasing fewer tractors and equipment due to the decrease in crop prices.
The U.S. Department of Agriculture projects that net farm income for 2024 will amount to $116.1 billion, serving as a comprehensive indicator of profits. The figure has decreased by 25.5% compared to the previous year.
Net farm income is projected to decrease by 27.1% this year due to the challenges faced by farmers dealing with lower prices for soybeans and corn, after accounting for inflation.
Farmers are facing the challenge of lower direct government payments and rising production costs, according to the USDA.
Around 14% of the production and maintenance jobs at the three facilities have been affected by the recent layoffs. Deere has a global workforce of over 80,000 employees.
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Shares of Deere experienced a slight decline of 1.6% during morning trading and have seen a decrease of approximately 7.5% since the start of 2024.
In June, Deere made the decision to relocate its skid steer and track loader manufacturing operations from Dubuque, Iowa to Mexico by the end of 2026.
The company announced its plans to establish a new factory in Ramos, Mexico, and is currently in the process of acquiring the necessary land.
Meanwhile, Deere has notified certain employees at its seeding and cylinder operations in Moline that more than 120 production workers will be placed on indefinite layoff starting from June 28.
