Monarch Tractor Layoffs: Company Warns of Potential Shutdown

Monarch Tractor Faces Potential Layoffs and Shutdown

Monarch Tractor, an autonomous electric tractor startup, has alerted its workforce to the possibility of significant layoffs, potentially exceeding 100 employees, or even a complete company closure. This information stems from a company-wide memo reviewed by TechCrunch.

Recent Workforce Reductions

Prior to this announcement, Monarch Tractor had already initiated some staff reductions in recent weeks. These cuts impacted both its California-based offices and remote teams located in India and Singapore, as reported by several former employees who requested anonymity.

Company Background and Funding

Founded in 2018, Monarch Tractor was established by a team including a former senior executive from Tesla’s initial gigafactory and Carlo Mondavi, a member of the renowned Mondavi winemaking family. The company successfully secured at least $220 million in funding, including $133 million in 2024.

Initial Goals and Restructuring

Monarch Tractor aimed to develop “driver optional” autonomous tractors suitable for applications in vineyards, fruit farms, and similar agricultural settings. A restructuring announced in late 2024 sought to broaden the tractors’ utility to include tasks like feed distribution on dairy farms and golf course maintenance.

CEO Praveen Penmetsa indicated a strategic shift towards increased sales of software services and licensing of the company’s autonomous technology.

Concerns Regarding Autonomous Technology

However, questions have arisen regarding the functionality of the autonomous technology. A lawsuit filed by Idaho dealership Burks Tractor, first reported by TechCrunch, alleges that the tractors sold were “defective” and “unable to operate autonomously.” Monarch Tractor has disputed these claims in court filings.

Pivot Towards Software Services

The company memo suggests a further shift away from tractor manufacturing, potentially unsurprising given the earlier termination of its contract with manufacturer Foxconn.

The human resources team communicated that a new business plan will allow Monarch’s customers to directly offer commercialized software as a service (SaaS) autonomy and other software solutions to consumers, creating new revenue streams for original equipment manufacturers (OEMs).

Potential Layoffs and Financial Outlook

The memo indicates the possibility of permanently laying off “up to 102 employees.”

According to CEO Penmetsa, over 70% of Monarch’s revenue in 2025 originated from licensing, with expectations for continued growth in 2026. He did not disclose the company’s total revenue.

Investor Interest and WARN Notice

Penemtsa stated that investors are demonstrating interest in Monarch’s technology for next-generation smart off-highway equipment, leveraging its cost-effective hardware and practical experience. He characterized the official layoff notice, a WARN notice, as a reflection of the company’s evolving focus towards revenue-generating segments.

Current Employee Count and Leadership Changes

The current number of employees at Monarch is uncertain. The company employed approximately 300 individuals in late 2024 before a restructuring resulted in layoffs affecting over 10% of the workforce. The extent of more recent cuts remains unclear.

Throughout the year, Monarch Tractor has also experienced departures of key personnel, including co-founder Mark Schwager, formerly of Tesla.

Co-founder's Perspective

In a LinkedIn post in July, Schwager expressed optimism about the company’s future. He stated, “We started Monarch with a daring vision: that farming could be electrified, automated, smart and made more profitable — all at once.” He further noted that Monarch is “in great position” for its next phase of development.

Update

This report has been updated to include a statement from Monarch Tractor’s CEO.