John Deere says it will temporarily suspend production of construction and forestry equipment next week with plans to lay off employees next month.
The equipment maker will suspend production at its Davenport and Dubuque facilities in Iowa beginning May 11, according to a report from the Quad-City Times. In Dubuque, Deere will also lay off 159 employees.
The shutdowns and layoffs come in response to negative impacts on the company’s business due to the coronavirus pandemic, the company said in a statement to the Times.
“The temporary suspension is due to supply chain disruptions and weakened demand of construction and forestry equipment amidst the COVID-19 global health crisis,” the Deere statement said.
Though the shutdowns are in response to the pandemic, Deere says the shutdowns aren’t out of the ordinary.
“Temporary production shutdowns such as this occur regularly on an annual basis at our facilities. This is a common measure to adjust for supply and demand adjustments,” the company tells the Times.
Even before the coronavirus pandemic reached the U.S. in March, Deere sales and revenues had fallen 4 percent year over year in the first quarter, which ended February 2. At the time, the company said it expected fiscal year 2020 sales to dip between 10 and 15 percent from 2019. In the wake of the coronavirus impacts, the company has since scrapped that forecast and has not issued another thus far.
The Dubuque layoffs are the second round at that facility this year. Following the posting of its 1Q earnings in February, which included a 10-percent decline in construction and forestry equipment sales, Deere announced the layoffs of 105 employees. Those cuts took effect April 6.