According to TechCrunch, Monarch Tractor laid off about 10% of its workforce as part of a restructuring to prioritize non-agricultural customers, license autonomous technology, and increase sales of its AI-based farm management software.
The Livermore, California-based autonomous electric tractor startup, which has raised a total of $220 million since its founding in 2018, laid off about 35 employees this week. Some Monarch employees told TechCrunch they were fired without severance pay. This is the second cut this year. Monarch laid off about 15% of its workforce last July.
CEO Praveen Penmesta told TechCrunch that the company decided to restructure after a slower-than-expected third quarter and despite raising $133 million in July from the likes of Foxconn and agri-food tech influencer Astanor. Penmesta said it’s unclear whether employees are being laid off without severance, but the company has been trying to help laid-off employees on a case-by-case basis.
“It all happened very quickly,” Penmesta said, referring to the recent collapse of California vineyards that made up most of Monarch’s early customers. These developments and the continued withdrawal of investment in agricultural technology led Penmesta and his team to explore other options.
“The industry has slowed down as we acquire new equipment and solutions, especially in the core agricultural sector,” Penmesta said. “But in the meantime, there are also some very interesting non-agricultural opportunities that are starting to sprout because of our success in Ag as a platform company.”
He said the company, which has shipped 500 tractors to date, is now focusing on expanding its customer base in a variety of ways. It is expanding beyond agricultural customers to include golf courses, solar power plants, and even local governments. We are also focusing more on selling our farm management software ‘WingspanAI’. And Monarch is in talks with other “off-road” car companies to license its self-driving technology.
Penmesta said the changes inspired cuts affecting parts of Monarch’s engineering and operations teams, among other things. He also said Monarch is leaning more heavily on Foxconn, a contract manufacturer that builds tractors at its Lordstown, Ohio, facility, for an operational role.
“We are a startup,” says Penmesta. “You have to be agile, right?”
