John Deere Layoffs: What’s Happening and Why?

In this video, we delve into the recent series of layoffs announced by John Deere and explore the reasons behind these workforce reductions. John Deere, a leading manufacturer of agricultural machinery, has faced significant challenges recently, leading to tough decisions impacting numerous employees. Let's break down the timeline and reasons behind these layoffs, understand the broader industry trends, and see what the future might hold for Deere and its workforce.

Timeline of Layoffs
September 20, 2023 - East Moline, IL, John Deere announced the layoff of 200 employees at its East Moline facility, which builds combines. This factory spans 3 million square feet on 71 acres and is a crucial site for Deere’s operations.

March 12, 2024 - Ankeny, Iowa, on this date, Deere targeted 150 employees for layoffs at its Ankeny plant, which produces sprayers and cotton pickers. This move marks the beginning of a series of workforce reductions in 2024.

March 26, 2024 - Waterloo, Iowa, a significant reduction occurred with 308 employees laid off at Waterloo, where Deere manufactures 7, 8, and 9 Series tractors. Waterloo’s total employment exceeds 5,000 workers, making this a substantial cut.

April 16, 2024 - Racine, WI (Case New Holland), it’s not just John Deere; CNH also announced layoffs of 200 employees at its Racine factory, where they produce Magnum Series Case Tractors and larger New Holland models.

May 8, 2024 - Moline, IL, John Deere laid off 34 employees at its Cylinder Works facility in Moline.

May 20, 2024 - Waterloo, Iowa, further layoffs hit Waterloo, with 190 employees losing their jobs.

June 5, 2024 - Moline, IL, another round of layoffs affected 120 workers at Deere’s Seeder and Cylinder plant in Moline.

June 6, 2024 - Urbandale, Iowa, Waterloo, and Ankeny, Deere announced the reduction of 100 employees, impacting 58 at Urbandale, headquarters of Deere’s Intelligent Solutions Group, 49 at Waterloo, and 16 at Ankeny.

July 1, 2024 - Davenport and Dubuque, Iowa, a significant layoff impacted 211 workers at Davenport and 99 at Dubuque. The Davenport facility manufactures skidders, wheeled feller-bunchers, four-wheel-drive loaders, articulated dump trucks, and motor graders. The Dubuque plant produces large-frame skid steer and compact track loaders, backhoes, utility, construction, and production-class crawler dozers, crawler loaders, and knuckleboom loaders.

July 10, 2024 - Waterloo, Iowa, another significant reduction came with 345 employees being laid off, set to take effect in late September.

Several factors contribute to these layoffs at John Deere:

Decreased Farm Income, the USDA predicts a significant decrease in farm income, potentially down by 25% in 2024. Lower income for farmers translates to reduced purchases of new equipment, directly impacting manufacturers like John Deere.

Also, John Deere is feeling the squeeze on profits. Despite reporting a net income of $10.1 billion last year, the company has only made $4.1 billion in the first two quarters of this year, indicating a downtrend in profitability. The United Auto Workers (UAW) strike, which ended in November 2021, resulted in a new six-year deal with significant concessions. The strike's resolution brought about increased labor costs, impacting Deere's financial planning and workforce management.

The agricultural equipment market experienced a boom following the Russian invasion of Ukraine, which drove up commodity prices and equipment demand. However, as market conditions normalize, Deere is adjusting its workforce to align with current demand levels.

The shift of some production lines to Mexico has garnered negative publicity for Deere, but they're not the only manufacture involved in that trend. . We’ll cover that in our next video and call out some other companies that are expanding their manufacturing footprint in Mexico.

Hashtags: #JohnDeere #Layoffs #AgriculturalEquipment #FarmIncome #UAWStrike #Manufacturing #WorkforceReduction #IndustryTrends #CaseNewHolland #EconomicChallenges

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[damham]

John Deere made $10 billion in net profits. They gave executives $100s of millions in bonuses, and over $7 Billion in stock buybacks, which increase share prices and greatly benefit major stock holders. Like executives, CEO, equity firms, etc...

[harveyrousejr.]

We started buying John Deere equipment back in the 80's. Back then Deere was a premium product with excellent parts and service. Today, it's still a nice unit, however, the red and blue brands have caught up. The layoffs will probably cause me to look at other brands very hard. They are not loyal to USA customers or employees so why should we the consumer be loyal to them.

[farmerjoe]

I have worked at a Deere dealership as a field Tech for 25 years, our dealership sells it all and Combines, Cotton Pickers, Articulating trackers, Sprayers etc. The issue is the equipment prices of new equipment goes up approximately 7 percent per year and is unsustainable for the farmers, simply put Deere is pricing itself out of the market. The price of commodities doesn’t increase 7 percent per year therefore it makes the equipment too expensive. For example a baler picker cost was 575, 000 when the machine first came out and cotton prices were averaging 80 cents per lint pound. Now forward to today the same picker is 1.2 million, and cotton is still averaging 80 cents a lint pound, this is not sustainable any more for farmers, so equipment sales and demand drop.

[damham]

I grew up working on farms and rarely did anyone buy new equipment. Often equipment was 30 years or older and still used daily.  Nowadays it seems like buying new equipment to replace ones only a few years old is the norm. Its replace, not repair.  We have been conditioned to desire the newest, and latest or we feel inadequate.

[BC-yvew]

I found myself in a maintenance bay at the local JD dealer talking to the head guy there about something and there was a brand new cotton picker in there they were getting prepped to deliver to a customer. Making small talk and trying to sound smart I marveled at what a machine it was and wondered out loud who has $600, 000 to spend (thinking that’s how much it cost). He laughed and said 600? This one is over 900! The cheapest new unit you could get was around 800. What the?!?! He said they sold one the year prior for over a million. These folks buying these things are pure businessmen, knowing how to manage debt and depreciating assets. I’m sure other brands are way up there too, it’s just a wild world now on big ag.

[Dago]

Hey Mike! 16 years ago i bought my first new tractor a Kubota L45. I wanted a four cyl engine, loader and 4wd. The tractor came standard with all of the above plus a quick attach on the front. Total package delivered to my home was 26 grand and some change.

That same tractor with the same requirements in JD their 4000 series was 43 grand, I couldn't justify that. I have has NO PROBLEMS with this tractor, and I plan on keeping it forever!

[frederickburns]

Years ago the question was raised about the salary of GMs CEO which was very unbelievable to the Blue Collar crowd. The question was asked if the CEO vanished off the face of the earth would GM COLLAPSE!?!?!?
Now thirty maybe even forty the same question can be asked about the CEO of JD whose salary was said to be twenty six million a year!?!?!?
I live in APPALACHIAN MTs of N.C and a retired CEO OF JD owns a sizable farm near by with all the trimmings plus a special breed of Yet the surrounding farms who have JD equipment are struggling with demand notes and equipment
And as for unions I understand stand why when you have executives with excessive salaries and the guy who gets dirty is paid the bare
The farmers help build this nation not some CEO sitting in a fancy
The reasons for the plant in Mexico is the same as the FORD when they built a plant there!?!? Labor cost; more profit for the ELITES OF THE
IT'S TIME PEOPLE TO PUSH BACK AND SAVE OUR REPUBLIC AND
A GOOD START WOULD BE TERM LIMITS, ABOLISH THE FEDERAL RESERVE AND OUTLAW

[Michael-jh]

Executives are stripmining the company

[brucespidle]

Mike, do a video on Kubota’s significant expansion in Kansas over the last few years. A great story for the heartland area!

[inthedarkwoods]

I'm from Mississippi... John Deere is known as "expensive parts" and "tons of plastic".... We all buy Kubota.

[cspfitch]

Thank you for doing all of this research we really appreciate it.

[craigpridemore]

Ok. I saw the layoffs question and was interested but you did such a great job explaining where the market's at, I'll be back!

[LorenBatchelder]

Putting this out there, I work at John Deere Waterloo works in maintenance. Seeing a lot of comments on UAW being the driving factor for Deere's moving jobs to Mexico. That may be true for auto manufacturing but the majority of Deere Union workers are in assembly and making under $25-$30/Hour. After 1997 John Deere only offers 401K with a 3% match for union employees, long gone are retirement healthcare and pensions for union employees. International UAW does very little for Ag workers.
Also July 24 they had about 100 salary workers let go, possibly more to follow.

[donrea]

Mike - great info but consider this. I sold farm equipme t in the 80's and 90's - $100, 000 was a lot of money, a d 25 ft was a good sized combine header. Today, it takes close to 1 million dollars to buy a coombine, and the headers are 40 feet plus! The point I am making is the capacity of these machines is huge! One machine will do what took 2- 5 machines yewrs ago, and replacement cost is prohibitive. They can not expect to sell near as many machines long term. My humble opinion.

[dtman]

Nice informative video. Thanks for doing the research and compiling the numbers. It's a little easier to understand

[Flowing]

Excellent information, keep up the good work. Thank you.

[wadehicks]

Appreciate the insight Mike. Hope the family is doing well.

[sirgermaine]

I once got a tour of the Waterloo foundry from my late uncle who was at that time the safety head- what a great experience that was.

[johnhelbig]

As an industry professional, you may remember an article in a trade journal a few years ago that spoke of where the farm machinery factories were located. If my memory serves, John Deere’s largest factory under one roof is in India.

[boydmasonlake]

Top shelf information !
Thank you, Mike!