diff --git a/__tests__/wait-for-job-snapshot.test.ts b/__tests__/wait-for-job-snapshot.test.ts
index e4eb059..bb2e871 100644
--- a/__tests__/wait-for-job-snapshot.test.ts
+++ b/__tests__/wait-for-job-snapshot.test.ts
@@ -2,7 +2,7 @@ import { describe, it, expect, vi, beforeEach } from 'vitest'
 
 vi.mock('../src/prisma.js', () => ({
   prisma: {
-    $executeRaw: vi.fn(),
+    $queryRaw: vi.fn(),
     $transaction: vi.fn(),
   },
 }))
@@ -11,27 +11,41 @@ import { prisma } from '../src/prisma.js'
 import { resetStaleClaimedJobs, tryClaimJob } from '../src/tools/wait-for-job.js'
 
 const mockPrisma = prisma as unknown as {
-  $executeRaw: ReturnType<typeof vi.fn>
+  $queryRaw: ReturnType<typeof vi.fn>
   $transaction: ReturnType<typeof vi.fn>
 }
 
 beforeEach(() => {
   vi.clearAllMocks()
+  // Default: no stale jobs returned from either query
+  mockPrisma.$queryRaw.mockResolvedValue([])
 })
 
 describe('resetStaleClaimedJobs', () => {
-  it('resets plan_snapshot to NULL when resetting stale claimed jobs', async () => {
-    mockPrisma.$executeRaw.mockResolvedValue(0)
+  it('runs two $queryRaw calls: one for FAILED, one for QUEUED re-enqueue', async () => {
     await resetStaleClaimedJobs('user-1')
+    // Two queries: failed jobs + requeued jobs
+    expect(mockPrisma.$queryRaw).toHaveBeenCalledTimes(2)
+  })
 
-    expect(mockPrisma.$executeRaw).toHaveBeenCalledOnce()
-    // Verify the template literal includes plan_snapshot = NULL
-    const call = mockPrisma.$executeRaw.mock.calls[0]
-    const sqlParts: string[] = call[0]
-    const fullSql = sqlParts.join('')
-    expect(fullSql).toContain('plan_snapshot = NULL')
-    expect(fullSql).toContain("status = 'QUEUED'")
-    expect(fullSql).toContain('claimed_at < NOW()')
+  it('FAILED query includes plan_snapshot = NULL reset and retry_count >= 2', async () => {
+    await resetStaleClaimedJobs('user-1')
+    const calls = mockPrisma.$queryRaw.mock.calls
+    // First call: FAILED transition
+    const failedSql = (calls[0][0] as string[]).join('')
+    expect(failedSql).toContain("status = 'FAILED'")
+    expect(failedSql).toContain('retry_count >= 2')
+  })
+
+  it('QUEUED re-enqueue query includes plan_snapshot = NULL and retry_count increment', async () => {
+    await resetStaleClaimedJobs('user-1')
+    const calls = mockPrisma.$queryRaw.mock.calls
+    // Second call: re-enqueue transition
+    const requeueSql = (calls[1][0] as string[]).join('')
+    expect(requeueSql).toContain("status = 'QUEUED'")
+    expect(requeueSql).toContain('plan_snapshot = NULL')
+    expect(requeueSql).toContain('retry_count = retry_count + 1')
+    expect(requeueSql).toContain('retry_count < 2')
   })
 })
 
diff --git a/src/tools/wait-for-job.ts b/src/tools/wait-for-job.ts
index 740710b..4aff070 100644
--- a/src/tools/wait-for-job.ts
+++ b/src/tools/wait-for-job.ts
@@ -73,14 +73,78 @@ const inputSchema = z.object({
   wait_seconds: z.number().int().min(1).max(MAX_WAIT_SECONDS).default(300),
 })
 
-export async function resetStaleClaimedJobs(userId: string) {
-  await prisma.$executeRaw`
+const STALE_ERROR_MSG = 'agent did not complete job within 2 attempts'
+
+export async function resetStaleClaimedJobs(userId: string): Promise<void> {
+  // Jobs that exceeded the retry limit → FAILED
+  const failedRows = await prisma.$queryRaw<
+    Array<{ id: string; task_id: string; product_id: string }>
+  >`
     UPDATE claude_jobs
-    SET status = 'QUEUED', claimed_by_token_id = NULL, claimed_at = NULL, plan_snapshot = NULL
+    SET status = 'FAILED',
+        finished_at = NOW(),
+        error = ${STALE_ERROR_MSG}
     WHERE user_id = ${userId}
       AND status = 'CLAIMED'
       AND claimed_at < NOW() - INTERVAL '30 minutes'
+      AND retry_count >= 2
+    RETURNING id, task_id, product_id
   `
+
+  // Jobs under the retry limit → back to QUEUED, increment retry_count
+  const requeuedRows = await prisma.$queryRaw<
+    Array<{ id: string; task_id: string; product_id: string; retry_count: number }>
+  >`
+    UPDATE claude_jobs
+    SET status = 'QUEUED',
+        claimed_by_token_id = NULL,
+        claimed_at = NULL,
+        plan_snapshot = NULL,
+        retry_count = retry_count + 1
+    WHERE user_id = ${userId}
+      AND status = 'CLAIMED'
+      AND claimed_at < NOW() - INTERVAL '30 minutes'
+      AND retry_count < 2
+    RETURNING id, task_id, product_id, retry_count
+  `
+
+  if (failedRows.length === 0 && requeuedRows.length === 0) return
+
+  // Notify UI via SSE for each transition (best-effort)
+  try {
+    const pg = new Client({ connectionString: process.env.DATABASE_URL })
+    await pg.connect()
+    for (const j of failedRows) {
+      await pg.query('SELECT pg_notify($1, $2)', [
+        'scrum4me_changes',
+        JSON.stringify({
+          type: 'claude_job_status',
+          job_id: j.id,
+          task_id: j.task_id,
+          user_id: userId,
+          product_id: j.product_id,
+          status: 'failed',
+          error: STALE_ERROR_MSG,
+        }),
+      ])
+    }
+    for (const j of requeuedRows) {
+      await pg.query('SELECT pg_notify($1, $2)', [
+        'scrum4me_changes',
+        JSON.stringify({
+          type: 'claude_job_status',
+          job_id: j.id,
+          task_id: j.task_id,
+          user_id: userId,
+          product_id: j.product_id,
+          status: 'queued',
+        }),
+      ])
+    }
+    await pg.end()
+  } catch {
+    // non-fatal — status transitions are already persisted
+  }
 }
 
 export async function tryClaimJob(