MOLINE, Ill. — Most people working for John Deere and Company knew going into 2024 that the projected downturn in farm machinery sales due to reduced farm income would lead to fewer sales of new tractors, combines and other commercial agricultural equipment, along with potential manufacturing sector layoffs. But few of them anticipated last week’s news that Deere, the world’s largest maker of farm machinery, would soon reduce its global workforce by as much as 15 percent (the figure had not yet been confirmed by Deere at Farm World press time, but has been widely reported by other news media). 

The July 24 announcement that Deere would make significant cuts to its global workforce came after an estimated 1,500 employees in Illinois and Iowa — most of them rank-and-file assembly workers — had already been laid off by Deere since the beginning of 2024. The most recent announcement suggests that around 4,500 of their estimated 30,000 U.S. workers could soon lose their jobs (based on a 15 percent workforce reduction). It was followed up with the following statement provided by Deere to Iowa News Now:

“As the largest global manufacturer of agricultural equipment, John Deere, like many others in our 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.

“This reduction in product demand and increased operational costs have unfortunately forced us to make tough decisions including layoffs at John Deere production facilities and reductions in our global salaried workforce. We are committed to providing assistance and benefits to affected salaried employees. 

“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.”

Prior to last week’s announcement, A Deere spokesperson has said that “employees are eligible to be recalled to their home factory for a period equal to their length of service” and that laid-off employees would receive automatic seniority for future openings they are qualified for. 

A hint as to what was coming came within Deere’s second quarter (May 16) earnings report to shareholders, which revealed that the company reported net income of $2.370 billion for the second quarter ending April 28, or $8.53 per share, compared with net income of $2.860 billion, or $9.65 per share, for the quarter ended April 30, 2023. For the first six months of the year, net income attributable to Deere & Company was $4.121 billion, or $14.74 per share, compared with $4.819 billion, or $16.18 per share, for the same period last year.

In addition, Worldwide net sales and revenues decreased 12 percent, to $15.235 billion, for the second quarter of 2024 and decreased 9 percent, to $27.420 billion, for six months. Net sales were $13.610 billion for the quarter and $24.097 billion for six months, compared with $16.079 billion and $27.481 billion last year.

“John Deere’s second-quarter results were noteworthy in light of continued changes across the global agricultural sector,” said John C. May, chairman and chief executive officer for Deere, in May. “Thanks to the dedication and hard work of our team, we continue to demonstrate structurally higher performance levels across business cycles and are benefitting from stability in construction end markets amid declining agricultural and turf demand.”

While Deere is not divulging how many agricultural equipment workers will be affected by the global layoffs, May’s statement seemed to foreshadow that the majority of the pink slips would be distributed within the farm and turf equipment sectors. 

The July 24 global layoffs came just hours after Deere announced that 34 salaried employees in Dubuque, Iowa and 69 more in Waterloo, Iowa had been laid off. 

Earlier, USDA projected that U.S. net farm income in 2024 would fall to $116.1 billion, a 25.5 percent drop from 2023 following a 16 percent reduction in 2023 versus 2022. The two-year drop in net farm income would reflect the largest such slide in U.S. history.