Autonomous electric tractor startup Monarch Tractor warned staff Thursday that it may have to lay off more than 100 employees or possibly even “shut down,” according to a company-wide memo obtained by TechCrunch.
The memo comes after Monarch Tractor had already cut some positions in recent weeks at its corporate facilities in California and at its remote teams in India and Singapore, according to multiple former employees who spoke to TechCrunch on condition of anonymity.
Monarch Tractor was founded in 2018 by a team that included a former top executive at Tesla’s first gigafactory and Carlo Mondavi, scion of the famous winemaking family. The company has raised at least $220 million, including $133 million in 2024, as it pursues a goal of making “driver-optional” autonomous tractors that could perform tasks in places like wineries and other fruit farms.
While Monarch Tractor claims to have shipped around 500 of these tractors to date, the company announced a restructuring in late 2024 that was supposed to see its tractors expand into other use cases, such as promoting feed on dairy farms and maintaining golf courses. CEO Praveen Penmesta also said at the time that Monarch Tractor would focus more on selling software services and licensing the company’s autonomous technology.
At least one customer — an early Monarch Tractors dealer — claims the autonomous technology never worked well, if at all, according to a lawsuit first reported by TechCrunch this week. Idaho dealership Burks Tractor claimed Monarch sold it “defective” vehicles that experienced “significant problems” after they arrived in 2024. Mainly, Burks accused Monarch tractors of being “unable to operate autonomously.” (Monarch denied the claims in court.)
Monarch Tractor suggests to employees in Thursday’s memo that it’s trying to move even harder away from making tractors — which may not be surprising given that the startup lost its manufacturer, Foxconn, earlier this year.
“The new business plan will enable Monarch’s customers to launch fully commercialized software as a service (SaaS) and other software offerings directly to consumers, unlocking new revenue streams for OEMs,” the startup’s HR team wrote. “Unfortunately, the timetable for completing the transition to the new business plan puts Monarch at risk of closure.”
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Monarch told employees in the memo that it may permanently lay off “up to 102 employees.”
It is unclear how many people currently work for Monarch. The startup had about 300 employees at the end of 2024, when it laid off more than 10% of the company as part of the restructuring. Former employees familiar with the recent cuts could not say exactly how big those layoffs were. Penmesta did not immediately respond to a request for comment.
During that year, Monarch Tractor also lost some top talent, including Tesla co-founder Mark Schwager.
“We started Monarch with a bold vision: that agriculture could be electrified, automated, smart and more profitable — all together,” Schwager wrote in a LinkedIn position in July, while explaining that he will remain on the company’s board. “Monarch is in a great position and in great hands for the next leg of its trajectory – making the timing right for this transition.”
