John Deere to lay off about 600 employees at three U.S. plants

New York
CNN
—

John Deere Co. said it will lay off about 600 employees at three U.S. plants as the Illinois-based company shifts production to a newly planned facility in Ramos, Mexico.

Effective Aug. 30, about 310 employees will be laid off at two Iowa plants in Dubuque and Davenport, as well as 280 employees at a plant in East Moline, Ill. In total, the three plants employ about 4,175 production and maintenance employees. The Illinois plant primarily produces harvesting equipment such as combines, while the Iowa plants make construction and forestry equipment.

This decision is the latest in a series of A series of layoffs in production Deere has sought to reposition itself as a technology company amid declining U.S. agricultural revenues.

“These changes are due to reduced demand for products produced at these facilities,” the company said in a statement to CNN on Friday. “To position Deere to meet future demand, we continue to take proactive steps to reduce production and inventory.”

The company reported a year-over-year revenue decline after reporting net income of more than $10.16 billion in 2023. In an earnings call in May, executives projected Deere’s 2024 revenue to be about $7 billion, citing higher production costs, lower shipping volumes and volatile weather that has made customers more cautious in their purchasing decisions.

“We expect a gradual decline in demand in the second half of 2024,” Josh Bell, the company’s director of investor relations, said on an earnings call in May. “It is worth noting that our production volumes will decline more than demand in the second half as we take proactive steps to reduce field inventories. This applies to all of our major markets, South America and Europe, and now also for large tractors in North America. We believe this approach puts us in the best position to build retail demand in 2025.”

The drop in demand comes as U.S. agriculture has faced significant headwinds over the past several years. According to the Department of Agriculture, the number of farms in the United States will reach 1.89 million in 2023, down 7% from 2.04 million in 2017.

In February, USDA Forecast Net farm income is expected to fall by $43 billion, or about 27%, in 2024, after hitting an all-time high in 2022. Sales of crops and livestock products are also expected to generate $21 billion less revenue this year, according to the U.S. Department of Agriculture.

Meanwhile, manufacturing jobs nationwide held steady at 13 million employees after recovering from a sharp pandemic-related decline in 2020, according to Data from the Bureau of Labor Statistics. especially, Machinery ManufacturingManufacturing jobs, which include jobs in agricultural equipment production and construction, have fallen by about 9,000 since the beginning of the year.