(NewsNation) — John Deere plans to lay off hundreds of employees across three Midwest factories by the end of next month.
NewsNation can confirm 590 production workers across factories in East Moline, Illinois (280), and Davenport (210) and Dubuque, Iowa (100), will be laid off effective Aug. 30.
The layoffs are due to reduced demand for products from those factories, the company said. It follows the loss of 650 jobs in Iowa earlier this year and 250 from Illinois in 2023.
In a recent investor call, John Deere said they have seen a sizable drop in riding lawn equipment and blamed high interest rates for fewer sales.
According to their records, the company made $10 billion in profits last year and spent over $7 billion in stock buybacks and its CEO John May received more than $26 million in total compensation.
Is this cost-cutting or are jobs being moved outside the US?
The announcement follows John Deere’s decision to move some operations from one of its Iowa facilities to Mexico by the end of 2026. The company will move the manufacturing of skid steer loaders and compact track loaders from its Dubuque facility to Mexico. Deere cited evolving its business model, rising manufacturing costs, and improving operational efficiencies as reasons for the move, according to Fox News.
The company said the decision was due to its efforts to evolve its business model, address rising manufacturing costs, and improve operational efficiencies, Fox News reported.
Deer also announced several layoffs earlier this year.
In June, more than 120 employees at its seeding and cylinder operations in Moline were placed on indefinite leave effective June 28, and about 500 employees were let go from its Waterloo plant in Iowa, per WQAD.
Additionally, in March, 150 employees at its Ankeny plant in Iowa faced layoffs, and more than 200 employees were laid off at its Harvester Works plant in East Moline in October 2023.
Farmers are buying less equipment
In May, Deere lowered its full-year profit forecast for the second time as farmers bought fewer tractors and other equipment amid declining crop prices.
Deere, which makes agricultural equipment, cut its profit outlook to $7 billion from a previous range of $7.50 billion to $7.75 billion. Before that, the company had forecast a 2024 profit between $7.75 billion and $8.25 billion.
The U.S. Department of Agriculture anticipates that 2024 net farm income, a broad measure of profits, will total $116.1 billion. That’s down 25.5% from a year earlier. Adjusting for inflation, net farm income is expected to be down 27.1% this year as farmers contend with lower prices for soybeans and corn. The USDA said that lower direct government payments and increased production costs are also weighing on farmers.
What is John Deere saying?
In a statement to NewsNation, John Deere said “these changes are being made due to the reduced demand for the products produced at these facilities.
“As stated in our second quarter earnings call, industry sales are expected to further decline in the back half of FY2024.”
John Deere provided a later statement to NewsNation as it looked to provide further clarity on the situation.
“John Deere is steadfast in its commitment to U.S.-based manufacturing,” the statement read.
“The company currently employs over 30,000 people in more than 40 U.S.-based facilities across more than a dozen states. We will continue to leverage our global footprint to ensure we remain efficient, productive and responsive to our customers’ evolving demands and market conditions.”
What about employees?
Former John Deere employee Chris Laursen says the Mexico relocation has greatly impacted towns around Iowa.
Laursen was previously employed by John Deere for more than two decades before opting into a voluntary termination program.
“It’s going to affect some of these small towns a lot, here in Iowa and Illinois,” Laursen said. “These are the type of jobs you don’t want to lose.
“John Deere’s not hurting for cash… we’ll see how the customers react to this.”
The Associated Press contributed to this story.