Monarch Tractor preps for layoffs and warns workers it could ‘shut down’

Autonomous electrical tractor startup Monarch Tractor warned workers Thursday it could want to lay off greater than 100 workers, or presumably even ‘shut down,’ in accordance to a company-wide memo obtained by TechCrunch.

The memo comes after Monarch Tractor was already reducing some positions over the previous couple of weeks at its California company amenities and distant groups in India and Singapore, in accordance to a number of former workers who spoke with TechCrunch on the situation of anonymity.

Monarch Tractor was based in 2018 by a workforce that included a former high govt at Tesla’s first gigafactory and Carlo Mondavi, a scion of the well-known winemaking household. The corporate raised not less than $220 million, together with $133 million in 2024, because it pursued a aim of constructing “driver optionally available” autonomous tractors that might carry out duties at locations like wineries and different fruit farms.

Whereas Monarch Tractor claims to have shipped round 500 of these tractors to date, the firm announced a restructuring in late 2024 that was supposed see its tractors develop to different use circumstances, like pushing feed at dairy farming and sustaining golf programs. CEO Praveen Penmesta additionally stated at the time that Monarch Tractor would focus extra on promoting software program providers and licensing the firm’s autonomous tech.

At the very least one buyer — one among Monarch Tractors’ first sellers — claims the autonomous tech by no means labored effectively, if in any respect, according to a lawsuit first reported by TechCrunch this week. Idaho dealership Burks Tractor claimed Monarch bought it “faulty” autos that skilled “important issues” after they arrived in 2024. Primarily, Burks accused Monarch’s tractors of being “unable to function autonomously.” (Monarch denied the claims in a courtroom submitting.)

Monarch Tractor suggests to workers in the memo on Thursday it is making an attempt to pivot even more durable away from making tractors — which can not be shocking, provided that the startup misplaced its contract producer, Foxconn, earlier this year.

“The brand new marketing strategy will allow Monarch clients to launch totally commercialized software program as a service (SaaS) autonomy and different software program choices direct to shoppers, unlocking new income streams to OEMs,” the startup’s human assets workforce wrote. “Sadly, the timing for finishing the transition to the new marketing strategy places Monarch susceptible to shut down.”

Monarch informed workers in the memo it could completely lay off “up to 102 workers.”

It’s unclear how many individuals at the moment work for Monarch. The startup had round 300 workers in late 2024 when it laid off more than 10% of the company as a part of the restructuring. The previous workers aware of the current cuts might not say precisely how giant these layoffs have been. Penmesta did not instantly reply to a request for remark.

By way of this 12 months, Monarch Tractor has additionally misplaced some high expertise, together with the co-founder from Tesla, Mark Schwager.

“We began Monarch with a daring imaginative and prescient: that farming could possibly be electrified, automated, sensible and made extra worthwhile — unexpectedly,” Schwager wrote in a LinkedIn post in July, whereas explaining he would stay on the firm’s board. “Monarch is in nice place and in nice palms for the subsequent leg of its trajectory – making the timing proper for this transition.”