Job Cuts at Key Plants
Specifically, about 280 jobs will be cut at the East Moline, Illinois plant, 230 positions will be eliminated at the Davenport, Iowa factory, and 100 workers will be laid off from the Dubuque, Iowa plant.
Source: MarcelX42/Wikimedia
These plants collectively employ around 4,175 people, with East Moline focusing on harvesting equipment and the Iowa facilities on construction and forestry equipment. Layoffs will take effect on August 30th.
Support for Affected Workers
Affected workers will be offered Supplemental Unemployment Benefit (SUB), covering up to 95% of their weekly net pay for up to 26 weeks, depending on their length of employment.
Source: Wikipedia Commons
Additionally, they will receive profit-sharing options and health benefits.
Strategic Shifts
John Deere stated that these changes are driven by reduced demand for products from these facilities and a need to better align with future demand.
Source: Freepik
The company is working to reposition itself as a technology leader amidst declining agricultural revenue in the U.S.
Production Relocation
Earlier, John Deere announced plans to move production of skid steer loaders and compact track loaders from Dubuque, Iowa, to Ramos, Mexico by the end of 2026.
Source: MarcelX42/Wikimedia
This shift is part of the company’s strategy to address rising manufacturing costs and enhance operational efficiencies. According to their statement, “This includes optimizing our factories for future products, making our operations more efficient and taking advantage of locations in the U.S. and globally, with a growing labor force.”
Previous Layoffs and Major Strike
The company has already implemented previous rounds of layoffs, including 225 at the Harvester Works plant in East Moline last October, 34 at the Moline Cylinder Works factory in May, and 150 at an Ankeny, Iowa plant in March.
Source: Freepik
In October 2021, John Deere faced a major strike involving over 10,000 workers at 14 plants across the U.S. The strike ended in November after a new six-year union contract was ratified.
Worker Frustration
A longtime John Deere worker from East Moline expressed frustration, stating, “We get wind of more layoffs daily, it seems, and it’s causing uncertainty all over.”
Source: Freepik
The worker, who wished to remain anonymous, attributed the layoffs to “greed,” pointing to John Deere’s recent profit of over $10 billion in fiscal year 2023 and the $26.7 million in total compensation for CEO John May.
Lack of Communication and Perceived Greed
The anonymous worker also noted a lack of communication from management.
Source: Alexander Grey/Unsplash
They added, “The only reason for Deere to do this is greed” and suggesting that the company is withholding information about job losses to avoid disrupting current production.
Financial Outlook and Shareholder Returns
Despite reporting a net income of $10.16 billion in 2023, John Deere has projected a decline in 2024 income to around $7 billion, citing higher production costs, reduced shipment volumes, and unpredictable weather.
Source: Freepik
The company has also invested more than $7.2 billion in stock buybacks and provided over $1.4 billion in dividends to shareholders.
USDA Forecasts Significant Drops in Farm Income and Revenue
The U.S. Department of Agriculture (USDA) has predicted a 25.5% drop in farm income to $116.1 billion this year.
Source: Freepik
Additionally, the USDA expects a $21 billion decrease in revenue from crop- and animal product sales in 2024.
Machinery Sector Sees Decline
Manufacturing jobs in the U.S. have stabilized at 13 million after recovering from the pandemic.
Source: NORRIE3699/Getty Images
However, machinery manufacturing jobs, including those related to agriculture and construction equipment, have declined by about 9,000 this year.
Layoffs Follow CEO’s Sale of 80-Acre Horse Farm
The latest round of layoffs follows reports that CEO John May is selling his 80-acre horse farm.
Source: Ourquadcities
The property is listed with an asking price of $3.925 million.