More layoffs expected at John Deere as sales for farming equipment decline

CEDAR RAPIDS, Iowa (KCRG/Gray News) - John Deere is expected to announce more layoffs next week.

Company employees reportedly received an email this week regarding the upcoming changes.

This comes after the company announced thousands of layoffs company-wide in the last three months to move production to a new facility in Mexico.

Dr. Peter Orazem, with the Department of Economics at Iowa State University, said the layoffs have to do with the cost of producing the tractor versus the demand for the product.

According to Orazem, during the pandemic, the U.S. agriculture economy was thriving. Farmers were buying new equipment while the price of crops was being purchased at a high price.

However, that’s predicted to change as the cost to build a tractor remains high while sales have gone down.

“Farm income is projected to fall 24 percent this year, so farmers are not expected to be purchasing new equipment in the way they were in 2021 and 2022,” Orazem said.

The company shared that moving some of its production to Mexico along with the announced layoffs are some parts of its cost-cutting moves.

John Deere reported it has already seen a 12% decrease in revenue.