In a significant development, billionaire Elon Musk and his social media company, X, have reached a tentative settlement with former Twitter employees who filed a lawsuit seeking $500 million in severance payments. The agreement was reported in a recent court filing, wherein both parties requested the US appeals court in San Francisco to delay an upcoming hearing to facilitate the finalization of the settlement paperwork.
The lawsuit, originally initiated by former employee Courtney McMillian, alleges that approximately 6,000 workers were wrongfully denied severance benefits. After Musk's takeover in 2022, the drastic downsizing saw more than half of Twitter’s workforce let go, with many employees claiming they received only a month or none at all in severance pay, significantly less than the expected six months.
As part of the cost-cutting measures, Musk notably dismantled teams related to trust and safety, human rights, and media, marking the swift and significant layoffs that became characteristic of the tech industry during that period. After hiring surges during the pandemic, major firms such as Facebook, Google, and Microsoft also resorted to mass layoffs in the ensuing economic shifts.
This settlement not only aims to resolve lingering grievances of former employees but also reflects a broader trend of job cuts in the tech sector, as companies reassess their strategies in a shifting economic climate. Details of the settlement agreement remain undisclosed, pending court approval. Both X and representatives for the former employees have been approached for comments regarding the settlement progress.
