Deere & Co., the agricultural machinery giant, is cutting nearly 600 jobs across its U.S. operations, signaling deepening troubles in the farming sector, according to a new report from Ag Daily.
This move comes as the company struggles with declining demand for farm equipment and a gloomy agricultural economic outlook.
The layoffs, set to take effect by August 30, will impact 280 employees at Deere’s Illinois headquarters and 310 workers in Iowa.
These cuts are part of a larger trend of workforce reductions that the company has been implementing over recent months.
In an email to staff, later shared on social media, a Deere representative acknowledged the difficult decision: “Unfortunately, this means parting with some of our talented and dedicated colleagues across our global production and salaried workforce.”
TRENDING: Federal Judge Deals Massive Blow to Biden’s Climate Change Agenda
The job cuts align with Deere’s recent financial performance.
The company reported a 15% drop in revenue for its second quarter, marking the third straight quarter of declining year-over-year sales.
John Deere plans to lay off hundreds of employees across three Midwest factories by the end of next month.https://t.co/MJa8RNFD2y pic.twitter.com/AUxSV0gmIu
— KSEE24 Fresno (@KSEE24) July 2, 2024
This downturn has forced Deere to lower its 2024 profit forecast twice, reflecting farmers’ reduced spending on tractors and other equipment due to lower crop prices.
The agricultural sector as a whole is facing headwinds.
The U.S. Department of Agriculture projects a 25.5% decrease in net farm income for 2024, totaling $116.1 billion. When adjusted for inflation, this represents a 27.1% decline.
Farmers are struggling with lower prices for key crops like soybeans and corn, reduced government payments, and higher production costs.
Deere isn’t just cutting jobs; it’s also shifting its manufacturing strategy.
John Deere ( 1890-2023 )…. pic.twitter.com/yEkQUlWdD6
— Evolution Of Life (@EvoIutlon) June 27, 2024
The company plans to move its skid steer and track loader production from Iowa to Mexico by 2026, suggesting a search for cost-saving measures in a tough market.
These decisions are impacting Deere’s stock performance. Shares dropped 1.6% following the layoff announcement and have fallen about 7.5% since the start of 2024.
READ NEXT: Three Quarters of EV Charging Developers Say Biggest Roadblock is They Can’t Get Enough Electricity
For investors and industry watchers, Deere’s actions serve as a bellwether for the agricultural equipment sector.
