Business briefs
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Deere & Co. announces layoffs
Deere & Co. is laying off nearly 600 workers as the farm equipment manufacturer deals with declining demand.
Deere confirmed Monday that the production positions being cut are concentrated at two factories in Iowa and one at its home base in Moline, Illinois, where 280 employees will be laid off effective Aug. 30. A combined 310 workers will be let go at the Iowa locations.
In its second-quarter earnings release in May, Deere reported a more than 15% decline in revenue, the third straight quarter of year-over-year sales declines. Company executives said at the time that they expected further sales declines in the second half of the fiscal year and said it would continue to “take proactive steps to reduce production and inventory.”
Deere & Co. turned in a quarterly profit of $2.37 billion, down from $2.86 billion in the same period the previous year, and lowered its full-year 2024 profit forecast for a second time as farmers continued to buy fewer tractors and other equipment due to declining prices for their crops.
The U.S. Department of Agriculture anticipates that 2024 net farm income, which is a broad measure of profits, will total $116.1 billion. That’s down 25.5% from a year earlier. Adjusting for inflation, net farm income is expected to be down 27.1% this year as farmers contend with lower prices for soybeans and corn. The USDA said that lower direct government payments and increased production costs are also weighing on farmers.
The most recent layoffs amount to about 14% of the more than 4,000 production and maintenance jobs at the three facilities. Deere employs more than 80,000 people worldwide.
Deere shares slipped 1.6% in morning trading and are down about 7.5% since the beginning of 2024.
Early in June, Deere announced that it was moving its skid steer and track loader manufacturing from a facility in Dubuque, Iowa to Mexico by the end of 2026. The company said that it was in the process of acquiring land in Ramos, Mexico to build a new factory.
At the same time, Deere informed some workers at its seeding and cylinder operations in Moline that over 120 production employees would be placed on indefinite layoff effective June 28.
Roaring Kitty reveals stake
in Chewy
NEW YORK | Shares of Chewy fell Monday in volatile trading after a regulatory filing revealed that Roaring Kitty, an investor at the center of the meme stock craze, has taken a 6.6% stake in the online pet retailer.
Roaring Kitty, whose legal name is Keith Gill, bought more than 9 million shares of Chewy last week, the Securities and Exchange Commission filing shows. Based on Friday’s $29.05 closing price, that amounts to a value of over $261 million — making him the company’s third-largest shareholder.
Shares in Chewy jumped more than 20% before the opening bell. But they ended the day down almost 7%.
Chewy, based in Plantation, Florida, did not immediately respond to a request for comment.
Gill tipped his hand last week on his feelings about the company, posting a picture of a dog on social media platform X and sending Chewy’s stock up more than 30% in intraday trading.
Gill made a name for himself in 2021, when he rallied retail investors around GameStop. At the time, the video game retailer was struggling to survive — and big Wall Street hedge funds and major investors were betting against it, or shorting its stock. But Gill and those who agreed with him changed GameStop’s trajectory by buying up thousands of shares in the face of almost all accepted metrics that told investors that the company was in serious trouble.
That began what is known as a “short squeeze,” when those big investors that had bet against GameStop were forced to buy its rapidly rising stock to offset their massive losses.
GameStop saw yet another rally in May — when Gill returned online for the first time in three years.
Gill has said he has faith in the ability of GameStop’s Chairman and CEO Ryan Cohen to modernize the company after what he did at Chewy. Cohen co-founded Chewy back in 2011. He stepped down from his role of Chewy’s CEO in 2018.
Gill’s actions have raised questions about whether he could be accused of stock manipulation. A lawsuit was filed Friday accusing Gill of engaging in a “pump and dump scheme” in regards to GameStop. But a court filing Monday indicated the plaintiff had voluntarily withdrawn the suit.
European
Union accuses Meta of breaking digital rules
LONDON | European Union regulators accused social media company Meta Platforms on Monday of breaching the bloc’s new digital competition rulebook by forcing Facebook and Instagram users to choose between seeing ads or paying to avoid them.
Meta began giving European users the option in November of paying for ad-free versions of Facebook and Instagram as a way to comply with the continent’s strict data privacy rules.
Users can pay at least 10 euros ($10.75) a month to avoid being targeted by ads based on their personal data. The U.S. tech giant rolled out the option after the European Union’s top court ruled Meta must first get consent before showing ads to users, in a decision that threatened its business model of tailoring ads based on individual users’ online interests and digital activity.
The European Commission, the EU’s executive arm, said preliminary findings of its investigation show that Meta’s “pay or consent” advertising model was in breach of the 27-nation bloc’s Digital Markets Act.
Meta’s model doesn’t allow users to exercise their right to “freely consent” to allowing their personal data from its various services, including Facebook, Instagram, Marketplace, WhatsApp, and Messenger, to be combined to target them with personalized online ads, the commission said.
Meta’s model also doesn’t give users the option of a service that’s less personalized but still equivalent to its social networks, it said.
“Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA,” Meta said in a statement. “We look forward to further constructive dialogue with the European Commission to bring this investigation to a close.”
The commission had opened its investigation shortly after the rulebook, also known as the DMA, took effect in March. It’s a sweeping set of regulations aimed at preventing tech “gatekeepers” from cornering digital markets under threat of heavy financial penalties.
One of the DMA’s goals is to rein in the power of Big Tech companies that have collected vast amounts of personal data on their users, giving them an edge on rivals competing in online ad or social media services. The commission indicated that in order for Meta to comply, it would like to see an option that doesn’t rely on a user’s full personal information being shared for advertising.
“The DMA is there to give back to the users the power to decide how their data is used and ensure innovative companies can compete on equal footing with tech giants on data access,” European Commissioner Thierry Breton, who oversees the bloc’s digital policy, said in a statement.
Meta now has a chance to respond to the commission, which must wrap up its investigation by March 2025. The company could face fines worth 10% of its annual global revenues, which could run into the billions of euros.
Under the Digital Markets Act, Meta is classed as one of seven online gatekeepers while Facebook, Instagram, WhatsApp, Messenger and its online ad business are among two dozen “core platform services” that need the highest level of scrutiny.
Monday’s decision is the latest in flurry of regulatory activity by Brussels targeting Big Tech companies. The EU leveled its first charges under the DMA a week ago, accusing Apple of of preventing app makers from pointing users to cheaper options outside its App Store. It also recently charged Microsoft with violating the bloc’s antitrust laws by by bundling its Teams messaging and videoconferencing app with its widely used Office business software.
—From AP reports
