Monarch Tractor is laying off about 10% of its workforce as part of a reorganization, prioritizing non-farm customers, licensing self-driving technology and offering AI-powered farm management software, according to TechCrunch. The company plans to expand its sales.
The Livermore, Calif.-based self-driving electric tractor startup, which has raised a total of $220 million since its founding in 2018, cut about 35 employees this week. Some Monarch employees told TechCrunch they were fired without severance pay. This is my second cut this year. Monarch previously laid off about 15% of its workforce in July.
CEO Praveen Penmetsa said in an interview with TechCrunch that the company had a slower-than-expected third quarter, despite raising $133 million in July from investors including Foxconn and agri-food tech impact company Astanor. announced that they had decided to reorganize their organization. Penmezza said it's unclear whether employees will be laid off without termination, but the company is working to help laid-off employees on a case-by-case basis.
“All of this happened very quickly,” Penmezza said, referring to the recent collapse of California vineyards that accounted for most of Monarch's early customers. These developments, along with continued setbacks in agritech investments, led Penmezza and his team to consider other options.
“The industry is experiencing a slowdown in acquiring new equipment and new solutions, especially in the core agricultural sector,” Penmezza said. “But on the other hand, as a platform company, we also have some very exciting opportunities outside of agriculture that are starting to emerge because of our success in agriculture.”
He said the company, which has shipped 500 tractors so far, is now focused on expanding its customer base in various ways. Our customers are expanding beyond agriculture to include golf courses, solar power plants, and even municipalities. The company is also focusing on selling its farm management software “WingspanAI.'' And Monarch is in talks with other “off-road” vehicle companies to license its self-driving technology.
Penmezza said those changes triggered layoffs, particularly hitting some of Monarch's engineering and operations teams. He also said Monarch is relying more on contract manufacturer Foxconn, which makes tractors at its Lordstown, Ohio, facility, for operational roles.
“We are a startup,” Penmezza said. “You have to be agile, right?”