Legacy tractor maker John Deere has announced layoffs at three Midwestern facilities as the company grapples with declining sales and the effects of tariffs on its bottom line.
“The struggling ag economy continues to impact orders for John Deere equipment,” the company said in a media statement regarding the layoffs. “This is a challenging time for many farmers, growers and producers, and directly impacts our business in the near term.”
Why It Matters
While the full implications of tariffs on the U.S. economy are still being established by economists and lawmakers, representatives of the agricultural sector have warned that the new duties could increase their costs and threaten footholds in key export markets. As John Deere, whose products are primarily aimed at farmers, said in its announcement, difficulties in the agricultural sector will continue to ripple through its operations and finances.
What To Know
The layoffs were first disclosed in a series of Worker Adjustment and Retraining Notification (WARN) notices that were later proved to be erroneous. However, John Deere later confirmed that there would be layoffs affecting 238 workers across three factories:
- Harvester Works in East Moline, Illinois: 115 workers. Last day of work August 29.
- Seeding and Cylinder in Moline, Illinois: 52 workers. Last day of work September 26.
- Foundry in Waterloo, Iowa: 71 workers. Last day of work September 19.
John Deere told Newsweek the workforce reductions were the result of “decreased demand and lower order volumes.”
On Friday, the company released its third-quarter results, which showed a 26 percent year-over-year drop in net income to $1.3 billion and a 9 percent decline in net sales and revenues to $12 billion. In a subsequent earnings call, the company attributed many of these difficulties to lower commodity prices and the effects of tariffs.
Gene J. Puskar/AP Photo
“Tariff costs in the quarter were approximately $200 million, which brings us to roughly $300 million in tariff expense year to date based on tariff rates in effect as of today,” said Director of Investor Relations Josh Beale.
Beale added that John Deere’s forecast for the pretax effect of tariffs