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

Autonomous electric tractor startup Monarch Tractor warned employees on Thursday that it may need to lay off more than 100 workers — and possibly even "shut down" — according to a company-wide memo obtained by TechCrunch.

The warning follows several weeks of job cuts across Monarch's California headquarters and its remote teams in India and Singapore, according to multiple former employees who spoke with TechCrunch on condition of anonymity.

Founded in 2018 by a team that included a former senior executive from Tesla's first Gigafactory and Carlo Mondavi of the well-known winemaking family, Monarch Tractor has raised at least $220 million, including $133 million in 2024. The company's goal has been to build "driver optional" autonomous electric tractors capable of performing tasks for vineyards and fruit farms.

Monarch says it has shipped around 500 tractors to date. But in late 2024, the company announced a restructuring aimed at expanding into new use cases — from pushing feed at dairy farms to maintaining golf courses. CEO Praveen Penmetsa also said at the time that Monarch would shift its focus toward software services and licensing its autonomous technology.

However, concerns about the tractors' performance have surfaced. One of Monarch's first dealers, Idaho-based Burks Tractor, filed a lawsuit alleging the company sold "defective" vehicles that suffered "significant problems" after delivery in 2024, including allegedly being "unable to operate autonomously." Monarch has denied the claims in court.

In Thursday's memo, Monarch told employees it is attempting to pivot even further away from manufacturing tractors — a shift that may have become more urgent after 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 human resources team wrote. "Unfortunately, the timing for completing the transition to the new business plan puts Monarch at risk of shut down."

Monarch said it may permanently lay off up to 102 employees, according to the WARN notice.

"In 2025, over 70% of Monarch's revenue came from licensing, and this segment is expected to grow further in 2026," Penmetsa told TechCrunch in an email on Wednesday. He did not provide a total revenue figure.

"Investors are showing interest in Monarch's technology for next-generation smart off-highway equipment, leveraging its cost-efficient hardware and field experience. The WARN notice reflects this shift in our teams and resources toward revenue-generating segments," he added.

It is not clear how many employees the company currently has. Monarch had around 300 employees in late 2024 before laying off more than 10% of its staff during its restructuring. Former employees familiar with the recent cuts could not confirm how large the newest round of layoffs has been.

Monarch Tractor has also lost key executives this year, including co-founder and former Tesla leader 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, noting 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."

This story has been updated with comments from Monarch Tractor's CEO.