Raven Lays Off 115 Employees; Reports Lower Annual Earnings
SIOUX FALLS, S.D. (AP) — South-Dakota based Raven Industries Inc., which makes products from high-tech farming equipment to balloons for the Macy’s Thanksgiving Day Parade, is citing a weak agricultural market as it lays off 115 employees.
The move Tuesday is part of a plan to save the company $13 million a year following months of declining earnings. The net income of the Sioux Falls-based manufacturer fell 26 percent to $31.7 million for the fiscal year that ended Jan. 31.
“It’s a tough market, and we expect it to be difficult for a while,” president and CEO Dan Rykhus told the Argus Leader ( ). “It’s about protecting the core (of the business) and making sure we take actions early enough that will allow us to be competitive and the proper size.”
The publicly traded company will have around 1,000 employees when the restructuring ends.
The cuts affect the company’s applied technology division and corporate services staff. Seventy-five of the laid-off employees were based in Sioux Falls. The cuts also affected employees in Missouri and Texas. The employees were given severance packages.
Raven is not the only company in the industry going through a restructuring process. Softer demand for agricultural machinery has pushed agricultural equipment manufacturers, including giant Deere & Co., to lay off employees. Deere’s chairman told stockholders last month that the Illinois-based manufacturer is preparing for the largest single-year sales drop in its 178-year history.
Commodity prices have been significantly lower than in previous years.
Rykhus said Raven thought the volume of orders would pick up around this time of the year as it usually does, but that didn’t occur.
“It’s just going to be a year where those orders aren’t coming,” he said. “Our customer relationship health is sound, very strong, and to a customer they tell us we’re not losing market share. The orders just aren’t there. Farmers don’t have money to spend on equipment. They’ve done fine the last two or three years, but there’s a lot of anxiety.”
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Information from: Argus Leader,
