John Deere to lay off about 600 workers from three U.S. factories

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In this aerial photo, John Deere construction and agricultural vehicles are loaded onto trucks at the John Deere Dubuque Works factory in Dubuque, Iowa, on Oct. 15, 2021.

New York

John Deere has announced it will lay off about 600 workers at three U.S. factories as the Illinois company moves production to a new planned plant in Ramos, Mexico.

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

The decision is the latest in a series of layoffs at the farm equipment maker in the past year as Deere has tried to reposition itself as a technology company amid declining farm incomes in the United States.

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

The company reported a decline in year-over-year revenue after announcing net income of more than $10.16 billion in 2023. In a May earnings call, executives forecast Deere’s revenue would be about $7 billion in 2024. They cited higher production costs, lower shipping volumes and unpredictable weather as factors that have made customers more cautious in their purchasing decisions.

“We expect a gradual decline in demand through the second half of 2024,” Josh Beal, the company’s director of investor relations, said in the May earnings call. “It’s notable that our production volumes will decline more than demand in the second half as we take proactive steps to reduce field inventories across all of our major markets, South America, Europe and now large tractors in North America. We believe this approach best positions us to build retail demand in 2025.”

The slowing demand comes as U.S. agriculture has faced significant headwinds in recent years. According to the Agriculture Department, there will be 1.89 million farms in the United States in 2023, a 7% decline from 2.04 million in 2017.

In February, the U.S. Department of Agriculture (USDA) predicted that net farm income will decline by $43 billion in 2024, about 27%, after reaching a record high in 2022. Sales of crops and livestock products are also expected to generate $21 billion less in revenue this year, according to the U.S. Department of Agriculture (USDA).

At the same time, manufacturing jobs nationwide have stagnated at 13 million workers after recovering from a sharp pandemic-related downturn in 2020, according to data from the Bureau of Labor Statistics. Specifically, machine manufacturing, which includes jobs that produce agricultural and construction equipment, has seen a decline of about 9,000 workers since the start of the year.

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