Deere Reduces Salaried Workforce Amid Declining Sales
Summary:
Deere & Co. is decreasing its salaried workforce globally as sales of tractors decline amid challenging agricultural market conditions, contributing to a wave of layoffs within the company.
The company cited rising operational costs and declining demand as the driving factors behind these “difficult choices,” as noted by a Deere spokesperson in an email sent to Agriculture Dive on Thursday. The company confirmed the layoff of salaried employees but withheld specific figures.
The latest round of cuts adds to previous layoffs affecting over 1,800 workers at Deere’s factories and offices in the Midwest this year. Additionally, Deere informed Iowa Workforce Development that 103 employees—34 in Dubuque and 69 in Waterloo—would be terminated immediately.
Analysis:
Due to a significant drop in farmer incomes, manufacturers of agricultural equipment are facing difficulties in selling tractors and combines, compelling Deere and its competitors to reduce production and minimize costs.
“The reduction in consumer demand and heightened operational expenses have unfortunately compelled us to make challenging decisions, including layoffs at John Deere production facilities as well as reductions in our global salaried workforce,” stated a company spokesperson.
Employees impacted by Deere’s layoffs will receive severance payments, benefits related to health and wellness, compensation for unused vacation time, and additional benefits.
Employees were instructed to work from home this week and delay any business travel ahead of the layoff announcement made on Wednesday, as noted in a company-wide communication shared on Reddit. Some commenters indicated that certain employees were laid off after decades of service.
“While the decision to reduce positions across the company was difficult, we believe these adjustments, along with our ongoing initiatives to cut costs and better align production and inventory levels, will strengthen John Deere’s position for the future,” the spokesperson added.
These changes follow five years of robust sales for manufacturers of tractors; however, economic challenges have led Deere and others to anticipate a continued decline in demand.
In June, two-wheel tractor sales plunged by over 16% compared to last year, while sales of combine harvesters dropped by more than 30%, according to recent data from the Association of Equipment Manufacturers. Deere anticipates a 20% decline in industry sales by the end of the year.
These tough circumstances “underscore the urgent need for a robust farm bill to support rural America and our agricultural producers,” remarked Curt Blades, AEM senior vice president, in a statement.
Maria Sanchez completed her Bachelor’s degree in Plant Sciences from the University of California, Davis, in the USA. Her studies focused on plant genetics and biotechnology, with an emphasis on developing disease-resistant crop varieties. Maria has contributed to several research projects aimed at improving crop resilience to climate change and is now pursuing her Master’s degree in Plant Breeding.