John Deere to Cut 600 Jobs as Production Moves to Mexico
John Deere announced plans to lay off approximately 600 employees across three US factories as the company transitions production to a new facility in Ramos, Mexico.
Effective August 30, the layoffs will impact around 310 workers at two Iowa plants in Dubuque and Davenport, and 280 employees at a factory in East Moline, Illinois. These factories, which collectively employ about 4,175 production and maintenance workers, produce construction and forestry equipment in Iowa and harvesting equipment in Illinois.
This decision marks the latest in a series of production layoffs by the farm-equipment manufacturer over the past year. John Deere is repositioning itself as a technology company amid declining agricultural revenue in the United States.
“These changes are being made due to reduced demand for the products produced at these facilities,” the company stated. “To better position Deere to meet future demand, we continue to take proactive steps to reduce production and inventory.”
The announcement follows a challenging financial period for Deere. Despite reporting a net income of over $10.16 billion in 2023, the company has experienced a year-over-year revenue slump. In a May earnings call, executives projected a 2024 income of about $7 billion, attributing the decline to higher production costs, lower shipment volumes, and volatile weather affecting customer purchasing decisions.
“We do expect incremental demand decline in the back half of 2024,” said Josh Beal, Deere’s director of investor relations. “Notably, our production volumes will decline more than demand as we’re taking proactive steps to drive down field inventories. This approach best positions us to build retail demand in 2025.”
The diminishing demand comes as US farming faces significant challenges. The Department of Agriculture reported 1.89 million farms in the US in 2023, a 7% decline from 2.04 million in 2017. The USDA also forecasted a $43 billion drop in net farm income for 2024, a 27% decrease from 2022, with crop and animal product sales expected to generate $21 billion less revenue this year.
Manufacturing jobs in the US have plateaued at 13 million after recovering from a sharp pandemic-related downturn in 2020, according to the Bureau of Labor Statistics. Machinery manufacturing, which includes jobs producing agriculture and construction equipment, has seen a decline of about 9,000 employees since the start of the year.
