Monarch Tractor preps for layoffs and warns employees it may ‘shut down’

Autonomous electric tractor startup Monarch Tractor warned staff Thursday it may need 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 was already cutting some positions over the last few weeks at its California corporate facilities and remote teams in India and Singapore, according to multiple former employees who spoke with TechCrunch on the 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, a scion of the famous winemaking family. The company raised at least $220 million, including $133 million in 2024, as it pursued a goal of making “driver optional” autonomous tractors that could perform tasks at places like wineries and other fruit farms.

While Monarch Tractor claims to have shipped around 500 of those tractors to date, the company announced a restructuring in late 2024 that was supposed see its tractors expand to other use cases, like pushing feed at dairy farming 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 tech.

At least one customer — one of Monarch Tractors’ first dealers — claims the autonomous tech 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. Primarily, Burks accused Monarch’s tractors of being “unable to operate autonomously.” (Monarch denied the claims in a court filing.)

Monarch Tractor suggests to employees in the memo on Thursday it is trying to pivot even harder away from making tractors — which may not be surprising, given that the startup lost its contract manufacturer, Foxconn, earlier this year.

“The new business plan will enable Monarch customers to launch fully commercialized software as a service (SaaS) autonomy and other software offerings direct to consumers, unlocking new revenue streams to OEMs,” the startup’s human resources team wrote. “Unfortunately, the timing for completing the transition to the new business plan puts Monarch at risk of shut down.”

Monarch told employees in the memo it may permanently lay off “up to 102 employees.”

It’s unclear how many people currently work for Monarch. The startup had around 300 employees in late 2024 when it laid off more than 10% of the company as part of the restructuring. The former employees familiar with the recent cuts could not say exactly how large those layoffs were. Penmesta did not immediately respond to a request for comment.

Through this year, Monarch Tractor has also lost some top talent, including the co-founder from Tesla, Mark Schwager.

“We started Monarch with a daring vision: that farming could be electrified, automated, smart and made more profitable — all at once,” Schwager wrote in a LinkedIn post in July, while explaining he would remain on the company’s board. “Monarch is in great position and in great hands for the next leg of its trajectory – making the timing right for this transition.”