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The Moline, Illinois-based company in April announced a new global operating model, combining its Worldwide Agricultural Equipment division and the Worldwide Commercial & Consumer Equipment division into a single unit, the Worldwide Agriculture and Turf division, effective May 1.
In order to immediately leverage the efficiencies of the merged divisions, the company announced a voluntary separation program. Deere had initially expected 200 salaried employees would leave the company and estimated a pretax charge of $25 million. Later, the company raised its forecast to $50 million of pretax charge, while reporting its second quarter results.
Deere, like many other companies, has been feeling the pinch of recession and is executing longstanding plans to manage costs and assets effectively in all types of market conditions.
The company's actions to tackle the economic challenges and to improve results include selective workforce reductions, aggressive factory-schedule adjustments, and a continued emphasis on process and efficiency enhancements across the enterprise.
Deere has made more than 1000 employees redundant this year, citing reduced market demand for its products. However, the company recently recalled 68 workers, due to increased orders for some construction products.
Earlier this month, the company said it would lay off majority of its production employees at the John Deere Ottumwa Works until later this year amid the slumping demand for its products. The John Deere Ottumwa Works manufactures balers, mower conditioners, windrowers and pull-type forage harvesters used by hay and livestock producers.
Of the total production workforce, the company laid off 494 employees indefinitely, while the remaining 195 will face periodic inventory adjustment layoffs throughout the next several months.
For the recent second quarter, Deere posted a steep decline in second-quarter profit, reflecting dismal performance across all its business operations, hampered by weak construction activity and consumer spending, amid the economic meltdown. The company also lowered its earnings outlook for 2009.
Deere closed Tuesday's regular trading at $39.95, down $2.20 or 5.22%, on a volume of 7.62 million shares.
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