Insight: Silicon Valley layoffs are a boon for tech-hungry farm equipment makers
13/02/2023 11:00
By Bianca Flowers
Feb 13 (Reuters) - Big agricultural and construction
equipment manufacturers in the American Midwest are on a mission
to lure Silicon Valley tech workers who have been caught up in a
wave of hiring freezes and layoffs, executives told Reuters.
Mass layoffs at major tech firms have opened the talent
pipeline for Illinois-based Deere & Co. DE.N - the world's
largest tractor maker - and rivals who are eager to add tech
workers to their payrolls as they expand into autonomous
tractors, mining trucks, and other smart farming technology.
With an abundance of job openings, the companies are
offering remote work arrangements and opening new offices in
major cities like Austin and Chicago, a potentially attractive
draw for workers who don't want to move to smaller Midwestern
cities, where many of the companies are based.
The executives said the newly available tech talent could
inject much-needed expertise into farm equipment manufacturing,
helping to transform the industry through the use of more
artificial intelligence and automation.
Detroit automakers are also hiring tech workers to meet the
growing software needs of vehicles, auto executives have said.
Historically, it has been difficult for construction and
agriculture equipment manufacturers to compete with Silicon
Valley compensation packages, Scott Wine, chief executive of CNH
Industrial CNHI.MI , an American-Italian machinery maker, said
in an interview.
"They were sucking so much oxygen out of the air because of
their significant budgets," Wine said. "Now, they're not hiring
and they're firing - so it just means we're getting a much
larger pool of potential candidates that we can call upon."
CNH hired more than 350 engineers last year, some of whom
came from Amazon.com AMZN.O and Microsoft Corp MSFT.O , Wine
said. CNH expects to spend more than $1.4 billion in research
and development as the company scales precision agriculture
offerings in 2023, he added.
The combine harvester producer has increased its focus on
agriculture in recent years to meet farmers' equipment demand,
stacking its tech workforce with highly skilled workers in
automation and artificial intelligence.
Building more cutting-edge machinery, such as a driverless
tillage tractor, appealed to 54-year-old Mukesh Agarwal who was
recruited by CNH from Microsoft in July 2021, before the latest
layoffs.
He now works mostly from his home office in Minnesota and
leads a team of software engineers as vice president of
precision software and cloud applications development.
"I didn't know much about the ag industry or what CNH did,
Agarwal said, admitting that the cultural change was an
adjustment during his transition to CNH. "But, I saw a
tremendous opportunity to bring science and innovation
together."
REMOTE-CONTROLLED
Deere's main rival, Irving, Texas-based Caterpillar Inc.
CAT.N , is also making a big push to recruit tech talent. New
hires in machine learning, computer science, and software
engineering were up 30% in 2022 from the previous year, Karl
Weiss, chief technology officer at Caterpillar, said in an
interview.
The manufacturer has invested in digital products to improve
construction safety using artificial intelligence. It had
roughly 500 open tech jobs in December 2022 and it is looking to
fill roles with the outflow of laid-off tech workers, Weiss
said.
"The layoffs in the tech community have not been lost on us.
We're actively talking to those employees," he said.
To boost recruiting efforts, Caterpillar exhibited at the
Consumer Electronics Show (CES) - an annual technology trade
show in Las Vegas - in-person for the first time last month.
Deere was also there, trying to recruit new talent.
Attendees got to see first-hand how machinery giants are
merging heavy metal with technology. In one demonstration, an
excavator 1,600 miles (2,580 km) away at one of Caterpillar's
Illinois plants was operated by someone using a remote operator
station and joysticks.
TECH TALENT PURGE
Thousands of workers have left or been laid off from tech
giants Amazon, Microsoft and Meta Platforms Inc META.O during
the biggest purge of tech talent since the dot-com crash of the
late 1990s.
Large tech companies shed more than 150,000 workers in 2022,
according to tracking site Layoffs.fyi. During the COVID-19
pandemic, big tech firms hired aggressively to capitalize on
advertising dollars as lockdowns prompted a surge in social
media use and online purchases.
Layoffs at West Coast-based technology companies have
coincided with Deere and CNH boosting investment in artificial
intelligence and precision agriculture products, such as
automated fertilizer applicators, that they hope to sell to
farmers who are trying to boost food production at a time of
global shortages.
While the availability of tech workers is plentiful now,
industry experts say the hiring window is short for companies to
reel in tech workers who also have opportunities at startups.
"Companies really need to jump into action," said Michael
Solomon, co-founder at 10x Management, a compensation
negotiation agency for senior tech talent. "It's a really great
opportunity, but I don't think it's going to last long."
Working from home was once a rare phenomenon at more
traditional companies like Deere, but is now more common. And,
in some cases, the companies are willing to let workers stay in
their current cities rather than relocating.
The goal is to offer prospective employees the best of both
worlds: work from home or come to a city office that more
closely resembles a Silicon Valley tech campus.
Deere has its global headquarters in the small city of
Moline, about 165 miles west of Chicago, but opening a tech hub
in Chicago's trendy West Loop neighborhood last year has helped
it be more visible to prospective job candidates who want to
live in metro areas.
The new office, which neighbors the corporate location of
Alphabet Inc's Google GOOGL.O in the Windy City, mimics the
atmosphere of many startups with unlimited snacks and beer,
standing desks, and a gameroom. The amenities aim to attract
tech workers.
In an acknowledgement that not all tech workers want to
relocate to the Midwest, Deere is also hiring employees in
Austin, Texas, where it opened an "Innovation Hub" in 2022 and
in San Francisco, where it has had an office since 2017, said
Johane Domersant, global director of talent at Deere.
Previously, Deere would have required new employees to
relocate to the Midwest, likely to Iowa or Moline.
"We are going to go where the talent is and that is a
different strategic bent that we wouldn't have done in the
past," Domersant said.
(Reporting by Bianca Flowers; Editing by Caroline Stauffer and
Ross Colvin)
((Bianca.Flowers@thomsonreuters.com;))