Monarch Tractor Warns of Layoffs and Potential Shutdown

The agricultural technology firm Monarch Tractor has issued a stark warning to its workforce, indicating that more than 100 employees could face permanent layoffs and the company itself may be forced to shut down entirely. This news came directly from an internal company memo distributed on Thursday, which outlined the precarious financial situation facing the electric and autonomous tractor manufacturer.

This development follows a series of earlier staff reductions that have taken place over recent weeks. These cuts affected personnel at the company’s corporate locations in California, as well as remote teams based in India and Singapore. Former employees, who requested anonymity when discussing the matter, confirmed these initial rounds of layoffs.

Founded in 2018, Monarch Tractor’s leadership team included Mark Schwager, a former high-level executive at Tesla’s inaugural gigafactory, and Carlo Mondavi of the prominent winemaking dynasty. The startup successfully secured substantial funding, amassing at least $220 million in venture capital, with a significant $133 million infusion occurring in 2024. Its core mission was to develop “driver optional” autonomous tractors designed for specialized agricultural settings such as vineyards and fruit orchards.

To date, the company reports having delivered approximately 500 of its tractors. However, a major restructuring announced in late 2024 signaled a shift in strategy. The plan was to broaden the vehicles’ applications to include tasks like distributing feed on dairy farms and maintaining turf on golf courses. At that time, CEO Praveen Penmesta also emphasized a new focus on selling software services and licensing the firm’s autonomous driving technology to other manufacturers.

The company’s technological claims, however, are now facing serious challenges. A lawsuit filed by one of Monarch’s earliest dealers, Idaho-based Burks Tractor, alleges that the autonomous systems never functioned properly. The lawsuit contends that the company sold “defective” vehicles that suffered from “significant problems,” with the primary issue being that the tractors were “unable to operate autonomously” as promised. Monarch has formally denied these allegations in its legal response to the court.

The internal memo suggests Monarch is now attempting an even more drastic pivot away from manufacturing hardware, a move that appears more urgent following the loss of its contract manufacturer, Foxconn, earlier this year. The company’s human resources department stated that a new business plan would focus on launching fully commercialized software-as-a-service (SaaS) autonomy products directly to consumers. This strategy aims to create new revenue streams for original equipment manufacturers (OEMs). Despite this plan, the memo conceded that the timing of this transition places the company at serious risk of ceasing operations.

The potential layoff of up to 102 staff members raises questions about the current size of Monarch’s workforce. The company employed around 300 people in late 2024 when it cut over 10% of its staff during the initial restructuring. The exact number of employees affected by the more recent, smaller rounds of layoffs remains unclear. Requests for comment from CEO Praveen Penmesta were not immediately returned.

This year has also seen a departure of key leadership. Co-founder Mark Schwager, the former Tesla executive, announced his exit in a July LinkedIn post. In the post, he expressed his continued belief in the company’s “daring vision” to electrify and automate farming, while also stating he would remain on the board and that Monarch was in a “great position” for its next phase.

(Source: TechCrunch)