Tractor Mike.
John Deere Layoffs: What’s Happening and Why?
Jul 25, 2024
#EconomicChallenges #JohnDeere #Layoffs
In this video, we delve into the recent series of layoffs announced by John Deere and explore the reasons behind these workforce reductions. John Deere, a leading manufacturer of agricultural machinery, has faced significant challenges recently, leading to tough decisions impacting numerous employees. Let's break down the timeline and reasons behind these layoffs, understand the broader industry trends, and see what the future might hold for Deere and its workforce.
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Timeline of Layoffs
September 20, 2023 - East Moline, IL, John Deere announced the layoff of 200 employees at its East Moline facility, which builds combines. This factory spans 3 million square feet on 71 acres and is a crucial site for Deere’s operations.
March 12, 2024 - Ankeny, Iowa, on this date, Deere targeted 150 employees for layoffs at its Ankeny plant, which produces sprayers and cotton pickers. This move marks the beginning of a series of workforce reductions in 2024.
March 26, 2024 - Waterloo, Iowa, a significant reduction occurred with 308 employees laid off at Waterloo, where Deere manufactures 7, 8, and 9 Series tractors. Waterloo’s total employment exceeds 5,000 workers, making this a substantial cut.
April 16, 2024 - Racine, WI (Case New Holland), it’s not just John Deere; CNH also announced layoffs of 200 employees at its Racine factory, where they produce Magnum Series Case Tractors and larger New Holland models.
May 8, 2024 - Moline, IL, John Deere laid off 34 employees at its Cylinder Works facility in Moline.
May 20, 2024 - Waterloo, Iowa, further layoffs hit Waterloo, with 190 employees losing their jobs.
June 5, 2024 - Moline, IL, another round of layoffs affected 120 workers at Deere’s Seeder and Cylinder plant in Moline.
June 6, 2024 - Urbandale, Iowa, Waterloo, and Ankeny, Deere announced the reduction of 100 employees, impacting 58 at Urbandale, headquarters of Deere’s Intelligent Solutions Group, 49 at Waterloo, and 16 at Ankeny.
July 1, 2024 - Davenport and Dubuque, Iowa, a significant layoff impacted 211 workers at Davenport and 99 at Dubuque. The Davenport facility manufactures skidders, wheeled feller-bunchers, four-wheel-drive loaders, articulated dump trucks, and motor graders. The Dubuque plant produces large-frame skid steer and compact track loaders, backhoes, utility, construction, and production-class crawler dozers, crawler loaders, and knuckleboom loaders.
July 10, 2024 - Waterloo, Iowa, another significant reduction came with 345 employees being laid off, set to take effect in late September.
Several factors contribute to these layoffs at John Deere:
Decreased Farm Income, the USDA predicts a significant decrease in farm income, potentially down by 25% in 2024. Lower income for farmers translates to reduced purchases of new equipment, directly impacting manufacturers like John Deere.
Also, John Deere is feeling the squeeze on profits. Despite reporting a net income of $10.1 billion last year, the company has only made $4.1 billion in the first two quarters of this year, indicating a downtrend in profitability. The United Auto Workers (UAW) strike, which ended in November 2021, resulted in a new six-year deal with significant concessions. The strike's resolution brought about increased labor costs, impacting Deere's financial planning and workforce management.
The agricultural equipment market experienced a boom following the Russian invasion of Ukraine, which drove up commodity prices and equipment demand. However, as market conditions normalize, Deere is adjusting its workforce to align with current demand levels.
The shift of some production lines to Mexico has garnered negative publicity for Deere, but they're not the only manufacture involved in that trend.
We’ll cover that in our next video and call out some other companies that are expanding their manufacturing footprint in Mexico.
