Autonomous electric tractor startup Monarch Tractor informed its staff on Thursday that it may need to lay off more than one hundred employees and potentially even shut down. This information comes from a company-wide memo obtained by TechCrunch.
The memo follows a period where Monarch Tractor was already eliminating some positions at its California corporate facilities and within its remote teams in India and Singapore. These earlier cuts were confirmed by multiple former employees who spoke anonymously.
Monarch Tractor was established in 2018 by a group that included a former top executive from Tesla’s first gigafactory and Carlo Mondavi, a member of the renowned winemaking family. The company secured significant funding, at least two hundred twenty million dollars, with one hundred thirty-three million of that raised in 2024. Its goal was to create driver-optional autonomous tractors for use in settings like wineries and fruit farms.
While the company states it has shipped approximately five hundred tractors, it announced a restructuring in late 2024. This restructuring was intended to expand the tractors’ use to other areas such as dairy farming and golf course maintenance. At that time, CEO Praveen Penmesta also said the company would shift its focus more toward selling software services and licensing its autonomous technology.
The company now faces a lawsuit from one of its first dealers, Idaho-based Burks Tractor. The dealership claims it received defective vehicles that experienced significant problems upon arrival in 2024. The primary accusation is that the tractors were unable to operate autonomously. Monarch Tractor has denied these claims in a court filing.
The internal memo from Thursday suggests Monarch is attempting to pivot even more aggressively away from manufacturing tractors. This strategic shift may be a response to the startup losing its contract manufacturer, Foxconn, earlier this year. The memo outlined a new business plan to offer software as a service autonomy and other software directly to consumers. However, it also stated that the timing of this transition puts the company at risk of shutting down.
Monarch informed employees that the potential layoffs could affect up to one hundred and two workers. The current total number of employees is unclear. The startup had around three hundred employees in late 2024 when it laid off over ten percent of its workforce during its initial restructuring. The exact size of the more recent cuts is unknown. CEO Praveen Penmesta did not immediately respond to a request for comment.
This year, Monarch Tractor has also seen the departure of key executives, including co-founder Mark Schwager, a former Tesla executive. In a July LinkedIn post, Schwager expressed that Monarch was in a great position and in great hands for its next phase, stating the timing was right for his transition to a board role.