John Deere, the renowned manufacturer of tractors and crop harvesters, has recently announced a significant wave of layoffs.
On Friday, approximately 610 production staff at its plants in Illinois and Iowa were told they would be out of job at the end of summer. The company is letting go 280 workers from a plant in East Moline, Illinois, and 230 from a factory in Davenport, Iowa.
Additionally, about 100 production employees at the company’s Dubuque, Iowa, plant will also be impacted.
These layoffs are said to be effective from August 30, as stated in a press release.
The reason cited for these layoffs is the reduced demand for John Deere’s products from these particular factories.
The company, which reported profits of $10.166 billion last year, mentioned that rising operational costs and declining market demand necessitate enterprise-wide changes to better position the company for the future.
In light of the layoffs, affected workers will be offered Supplemental Unemployment Benefits (SUB). This will cover approximately 95% of their weekly net pay for up to 26 weeks, depending on their years of service.
They will also receive profit-sharing options and health benefits to assist them during this transition period.
John Deere, known for its iconic green and yellow branding and long-standing history since its establishment in 1837, recently announced a decision to shift the manufacturing of skid steer loaders and compact track loaders from its Dubuque facility to Mexico by the end of 2026.
This move is aimed at adapting its business model, addressing rising manufacturing costs, and enhancing operational efficiencies.
The company has faced previous rounds of layoffs including:
- 225 at its Harvester Works plant in East Moline
- 34 at its Moline Cylinder Works factory
- 150 at a plant in Ankeny, Iowa.
- Approximately 500 employees have been let go at its Waterloo plant in Iowa.
Despite these changes, John Deere’s market capitalization stood at around $102.81 billion, with significant net sales and revenues reported over the first two quarters of the year.
This comes months after a judge stated that plaintiffs in a lawsuit against John Deere met legal thresholds. Crop farmers and farmers have filed a suit stating that John Deere unlawfully conspired to restrict services for maintenance and repair.
“According to the complaint’s allegations, Deere has the ultimate control of the repair services market,” Johnston wrote in his 89-page order. “These allegations are not mere legal conclusions. The complaint is chock-full of factual allegations to support this conclusion.”
In addition, the agricultural equipment industry is experiencing challenges due to lower crop prices, leading to excess inventory and decreased sales of large agricultural equipment.
The Department of Agriculture forecasts a 25.5% decline in farm income this year, adding to the industry’s struggles.
These developments come amidst reports that John Deere CEO John May has put his 80-acre horse farm property up for sale, with an asking price of $3.925 million.
As the company navigates market challenges and restructuring efforts, the impact on employees and the broader industry remains a focal point of concern.
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