Monarch Tractor, an autonomous electric tractor startup, reportedly cautioned its staff on Thursday about potential layoffs affecting over 100 employees, or even a possible ‘shutdown,’ according to a company-wide communication obtained by TechCrunch.
This communication follows earlier position reductions at Monarch Tractor’s California corporate offices and remote teams in India and Singapore over recent weeks, as indicated by multiple former employees who spoke anonymously with TechCrunch.
Founded in 2018, Monarch Tractor’s team included a former leading executive from Tesla’s initial gigafactory and Carlo Mondavi, from the renowned winemaking family. The company accumulated at least $220 million in funding, including $133 million in 2024, pursuing its objective of creating “driver optional” autonomous tractors for use in locations like vineyards and other fruit farms.
While Monarch Tractor states it has delivered approximately 500 tractors to date, the company announced a restructuring in late 2024 intended to broaden tractor applications to areas such as feed distribution on dairy farms and golf course maintenance. CEO Praveen Penmesta also mentioned at the time that Monarch Tractor would increase its emphasis on offering software services and licensing its autonomous technology.
According to a lawsuit initially reported by TechCrunch this week, at least one customer — an early dealer of Monarch Tractors — alleges the autonomous technology was largely ineffective. Burks Tractor, an Idaho dealership, claimed Monarch sold it “defective” vehicles with “significant problems” upon arrival in 2024. Specifically, Burks accused Monarch’s tractors of being “unable to operate autonomously.” (Monarch refuted the claims in a court filing.)
In the memo on Thursday, Monarch Tractor intimates to employees a further shift away from tractor manufacturing, which aligns with the earlier loss of its contract manufacturer, Foxconn, this year.
“The revised business strategy will allow Monarch customers to directly offer fully commercialized software as a service (SaaS) autonomy and other software solutions to consumers, creating new revenue opportunities for OEMs,” the startup’s human resources department stated. “Regrettably, the timeframe for finalizing the transition to this new strategy places Monarch at risk of closure.”
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Monarch indicated to its employees in the memo that it might permanently dismiss “up to 102 employees.”
The current headcount at Monarch is not clear. The startup employed approximately 300 individuals in late 2024, before laying off over 10% of its staff as part of its restructuring. Former employees familiar with the recent layoffs could not provide exact figures for those reductions. Penmesta has yet to respond to a request for comment.
Throughout the current year, Monarch Tractor has also experienced departures of key personnel, including co-founder Mark Schwager from Tesla.
“We initiated Monarch with an ambitious vision: to make farming electrified, automated, intelligent, and more profitable—simultaneously,” Schwager shared in a LinkedIn post in July, while noting he would remain on the company’s board. “Monarch is well-positioned and in capable hands for its next phase – making this an opportune moment for this transition.”
