Faced with lower customer demand for its equipment, declining sales and a challenging ag economy, John Deere released a statement today confirming cuts for its global salaried workforce.
Without detailing the number of salaried employees affected, either locally or globally, Deere said in a statement to the Quad Cities Regional Business Journal on Wednesday, July 24, it has been forced “to make tough decisions including layoffs at John Deere production facilities and reductions in our global salaried workforce.”
Today’s salaried cuts expected today come on the heels of hundreds of previously announced layoffs of John Deere production workers in recent months. There was no indication from Deere when the salaried workforce reductions would take effect.
In its emailed statement from Deere & Co., headquartered in Moline, the company said:
“As the largest global manufacturer of agricultural equipment, John Deere, like many others in the industry, faces significant economic challenges, rising operational and manufacturing costs, and reduced customer demand, including a 20 percent decline in sales from 2023 to 2024.”
While the company declined to answer specific questions from the QCBJ seeking details about the notification process or the locations impacted, it did outline the assistance and benefits it will provide the affected salaried workers.
According to an email from Jennifer Hartmann, director of public relations and enterprise social media for John Deere, those impacted salaried employees will receive:
- Up to 12 months of severance based on years of service.
- Pro-rated short-term incentive and long-term incentive cash compensation benefits.
- Payment for any earned and unused vacation or paid time off and other factors.
- Access to ongoing health and wellness benefits and 12 months of professional job placement service.
“While the decision to reduce roles across the company was a challenging one, the company is confident that these adjustments, coupled with our ongoing efforts to reduce costs and align production and inventory levels, will position John Deere strongly for the future,” the company statement said.
According to an earlier emailed letter purportedly from Deere and posted on social media accounts, the company was expected to hold a virtual global all-staff meeting this morning to provide more detailed information about the layoffs.
Ahead of today’s expected salaried workforce reductions, on Tuesday, July 23, Deere posted an article entitled “John Deere’s Commitment to Manufacturing” on its website.
The Commitment to Manufacturing post shared these details:
- Since 2019, Deere has invested more than $2 billion in U.S. factories, including its “new See & Spray line at Des Moines Works in Des Moines, Iowa, the X9 combine assembly line at Harvester Works in East Moline, Illinois, a new excavator factory in Kernersville, North Carolina and new tractor line assemblies in Waterloo.”
- To position U.S. factories for “these value-additive activities it is sometimes necessary to move less complex operations, such as cab assembly, to other locations.”
- The company added, its economic impact in “our U.S. hometown communities and all those where we have a presence is valued at $27 billion.”
- Deere added that it “deeply values the highly skilled U.S. workforce in our hometown communities that allow John Deere to make the best equipment in the world.”
- In the U.S., John Deere employs about 30,000 people in more than 60 U.S.-based facilities across 16 states. “Meanwhile, our valued John Deere dealers employ over 50,000 people at dealerships across the country and in 2023, the company spent over $16 billion with U.S.-based suppliers.”
- The company said it has the most highly skilled workers in domestic manufacturing and credited investments in skilled trades and dealer technician training programs for military veterans and high school students in rural communities across the country. “These programs are helping to build the next generation of John Deere team members and we’re proud to build America’s manufacturing workforce of tomorrow.”
The “Commitment to US Manufacturing” post concluded: “John Deere is a great American company, employing great American workers, making the best equipment the world over. We are proud of our history, our people and our ongoing role in U.S. manufacturing.”
According to data from the Quad Cities Chamber, John Deere is the largest employer in the Quad Cities region.
Deere employs 9,700 workers in the bistate area and has 6,200 Quad Cities retirees, an economic and social impact report released by Deere last fall showed. According to the findings, Deere’s local workforce has a $9 billion annual impact on the local economy. In addition, the company and its suppliers’ collective output generates a total of $12.9 billion in local area economic activity.
Today’s salaried employee layoffs follow significant Deere production workforce reductions across the Midwest. They include more than 600 hourly jobs at John Deere plants in East Moline, Davenport and Dubuque, Iowa, which were to be effective on Aug. 30.
Previously in June, production workers at these facilities were notified of layoffs: John Deere Des Moines Works in Ankeny, Iowa, 16 layoffs; John Deere Intelligence Solutions, Urbandale, Iowa, 58; and John Deere Waterloo Works, 49.
The production worker layoffs also followed the manufacturer’s second quarter earnings report in mid-May, in which Deere said that industry sales are expected to further decline in the last half of its fiscal 2024 year. In that report, Deere reported net income of $2.370 billion for the second quarter, ended April 28, compared with net income of $2.860 billion for the same quarter last year.
QCBJ reporter Kenda Burrows contributed to this report.
