John Deere announced significant layoffs on Friday, affecting 610 employees across its Illinois and Iowa plants. This decision comes in response to declining demand and rising operational costs, according to a report from Fox News.
The layoffs will take effect on August 30, impacting 280 workers at the East Moline, Illinois plant, 230 at the Davenport, Iowa facility, and about 100 at the Dubuque, Iowa plant. The company has offered affected employees a Supplemental Unemployment Benefit, covering approximately 95% of their weekly net pay for up to 26 weeks, as well as profit-sharing options and health benefits.
John Deere reported a profit of $10.166 billion in 2023, yet cited increased operational costs and a market downturn as reasons for the layoffs. The company stated, “Rising operational costs and declining market demand require enterprise-wide changes to achieve our goals and best position the company for the future.”
This move is part of a broader strategy to optimize operations amid evolving business conditions. On May 31, John Deere announced plans to relocate the production of skid steer and compact track loaders from Dubuque, Iowa to Mexico by the end of 2026. The company aims to address rising manufacturing costs and improve efficiency through this relocation.
Employees have expressed concern over the frequent layoff announcements. An anonymous worker from the Harvester Works plant in East Moline told The Guardian, “We get wind of more layoffs daily, it seems, and it’s causing uncertainty all over. The only reason for Deere to do this is greed.”
John Deere’s financial standing remains robust, with a market capitalization of around $102.81 billion and a net income of $4.121 billion reported for the first half of 2024. However, the company has revised its profit forecast downward twice this year, reflecting anticipated declines in sales of large agricultural equipment due to lower crop prices and market oversupply.
The challenges facing John Deere are part of broader issues within the agricultural sector. The Department of Agriculture forecasts a 25.5% decrease in farm income in 2024 compared to 2023, further impacting demand for agricultural machinery.
As John Deere navigates these challenges, the company’s strategy of layoffs and relocating production reflects the broader economic pressures facing the agricultural industry.
