It’s an unfortunate story that doesn’t seem to have an ending, at least not yet: John Deere is laying off 134 workers from its Seeding and Cylinder Operations in Moline, Ill.
The reported layoffs are in addition to the 319 layoffs that took place last week in Moline.
WQAD-8 ABC was first to report the new cuts and John Deere leadership has confirmed the bad news. The local ABC affiliate also reported 170 layoffs took place across John Deere’s Iowa operations last week.
Estimates of the total number of layoffs globally are well north of 1,000 at this point, though John Deere has never confirmed the exact number let go.
According to WQAD-8 ABC, the layoffs at Seeding and Cylinder Operations will move forward in three phases, with 43 production workers set to receive walking papers effective Aug. 16, another 55 to receive the same fate on Aug. 30 and then 36 to be let go on Oct. 4.
We can discuss job cut numbers until we’re blue in the face, but one overarching question remains unanswered: How will these cuts affect the performance, reliability and continued innovation of John Deere’s machines and precision ag tech stack going forward?
Will there be talent migration away from Deere?
Farm Journal obtained early layoff warning letters sent to the Illinois WARN office by John Deere human resources representatives.
Here’s a quick, off-the-cuff analysis by job title for the Illinois layoffs:
- Positions eliminated that contained the words “manager,” “lead or leader” or “director” in the job title: 102 layoffs, equating to 32% of the 319 dismissals.
- Positions eliminated that contained the word “engineer” in the job title: 69 layoffs, equating to 22%.
- Positions eliminated that contained the words “senior” and/or “software” in the job title: 44 layoffs, equating to 14%.
- Positions eliminated that contained the word “product” in the job title: 36 layoffs, equating to 11%.
Now, job titles being the nebulous, often vague insignias they are in today’s corporate America, we can’t say with 100% certainty what affect, if any, these layoffs will have on John Deere’s planting, harvesting and implement-pulling machines and smart farming technologies going forward.
But it seems fair to ponder whether a void of expertise could be left in the wake of so many departures?
Will John Deere, if times indeed are tough financially, still make strategic investments in leading-edge technologies, such as its 2017 investment in Blue River Technologies – which netted arguably John Deere’s biggest ag tech home run of late with its See & Spray selective spraying technology – and other early-stage VC opportunities such as InnerPlant? That startup is bringing to market an early stress alerting transgenic trait technology in soybeans that John Deere has invested $16 million.
Will those needle-moving, innovation enabling investments remain part of the John Deere brand?
Yes, it will, John Deere executive Cory Reed told U.S. Farm Report host Tyne Morgan last week.
“The long-term outlook for global commodities grown here in the U.S. still looks really strong. We’re still bullish on that,” Reed told Morgan. “It’s the reason that even when we see these cycles potentially coming, we invest directly through them. We’ve never invested more in research dollars than we did this year, and in the next five years we will invest more than we have over the past five years.”
While investing in iron and ag tech R&D is but one side of the coin, the dismissal of tenured and talented employees begs the question whether John Deere will someday need to claw back some of the human resources that exited its hallways in 2024?
Or, is this yet another “new normal” large companies like Deere and its rivals in the equipment manufacturing space must adapt too?
Why are equipment companies laying off workers?
As John Deere and several others across the farm economy have stated, farm equipment demand compared with last year has fallen 15% to 20%.
AGCO, one of John Deere’s chief rivals in the farm equipment manufacturing space, just announced its first-quarter 2024 sales suffered a 15% hit compared to last year. Earlier this summer, AGCO confirmed it would lay off a portion of its domestic workforce.
CNH Industrial, the parent company of farm equipment brand Case IH, announced its net income is down 38% compared with 2023 second quarter fiscal results. The global conglomerate shared its own plans back in April to lay off 200 workers at the Case IH operation in Racine, Wis., and move those positions to a production facility in Mexico.
John Deere is also moving some of its tractor cab production to Mexico, drawing the ire of many farmers who pride themselves on supporting American-made products and manufacturing.
The Association of Equipment Manufacturers June 2024 U.S. equipment sales report showed similar negative pressure: combine sales were down 31% versus June 2023, and sales of both two-and-four-wheel drive tractors were down a combined 17% over the same period.
The overall farm economy has tightened up significantly across the back half of 2023 and into 2024, perhaps even at a faster pace than many ag economists projected.
USDA-NASS released it’s 2023 Farm Expenditures Report this week, showing a nearly $30 billion increase in production expenses levied onto the backs and shoulders of American farmers from 2022 to 2023. At the same time, corn prices are down significantly, trading at $3.90 per bushel as of July 31. Last year the price of corn was just a hair above $6.50 per bushel heading into fall harvest. Compounding the situation, demand for corn ethanol is down and interest rates are still hovering above 5%, making the farm credit landscape even more challenging.
“Net farm income is expected to be down in the mid to high twenties and when that happens and commodity prices pull back and interest rates are a little bit higher and we see volatility in the weather, it creates uncertainty and it creates some interruptions in demand and we’re experiencing that today,” Reed says.
United Auto Workers (UAW) is pushing back against the narrative that John Deere needs to layoff workers to move the company forward in today’s tough economic climate. The union issued a statement calling the layoffs “reckless” and pointed to CEO John May’s $26.8 million dollar compensation package and $43.6 billion in stock buybacks and dividends issued over the past two decades as evidence that Deere is prioritizing corporate profits over the well-being of its American workforce – the same workers who helped build John Deere into the company it is today.
