Deere & Co. is set to lay off close to 600 workers in response to dwindling demand for farm equipment. The company confirmed on Monday that the layoffs will primarily affect production roles across two Iowa factories and its headquarters in Moline, Illinois, with 280 employees to be let go by August 30. An additional 310 positions will be eliminated in Iowa.
The decision follows Deere's second-quarter earnings report, revealing a significant 15% revenue drop, marking the third consecutive quarter of year-over-year sales decline. Executives foresee further decreases in sales through the latter half of the fiscal year and intend to take proactive measures to scale back production and inventory.
Despite reporting a quarterly profit of $2.37 billion, down from $2.86 billion the previous year, Deere revised its full-year 2024 profit forecast downwards for the second time. This adjustment reflects a continued downturn in tractor and equipment purchases by farmers, influenced by declining crop prices.
According to the U.S. Department of Agriculture, projected net farm income for 2024 is expected to decrease by 25.5% compared to the previous year, with an inflation-adjusted decline of 27.1%. Factors contributing to this downturn include reduced government support and escalating production costs, adding pressure on agricultural profitability.
The layoffs represent approximately 14% of the total workforce across the affected facilities, which collectively employ over 4,000 in production and maintenance roles. Deere, a global employer with over 80,000 personnel, has seen its shares decline by 1.6% in morning trading and by 7.5% since the start of 2024.
Earlier in June, Deere announced plans to relocate its skid steer and track loader manufacturing from Dubuque, Iowa to Mexico by the end of 2026. The company has begun acquiring land in Ramos, Mexico to establish a new manufacturing facility. Concurrently, Deere notified employees in Moline of layoffs affecting more than 120 production staff in seeding and cylinder operations, effective June 28.
