In a significant development, Elon Musk and his social media venture X have agreed to a tentative settlement with former Twitter employees who have accused the company of wrongful termination and failing to provide suitable severance packages. The settlement, reported in a court filing, has led both parties to request the US appeals court in San Francisco to delay an upcoming hearing to finalize the necessary paperwork.
The lawsuit, primarily led by ex-employee Courtney McMillian, argues that about 6,000 individuals were unjustly denied benefits under the company's severance plan after Musk's takeover in 2022 triggered massive layoffs as part of a cost-cutting strategy. The former staff contend that many were owed payments equivalent to six months' salaries, but in reality, those terminated received no more than one month—or sometimes even nothing at all.
The sweeping layoffs resulted in significant downsizing within the company, affecting many teams such as trust and safety, human rights, and media departments. This mass firing event was among the first of several similar workforce reductions experienced across the technology sector, as companies aimed to trim operational costs after an early pandemic hiring surge.
Musk had previously faced criticism for implementing job cuts during his leadership at the federal level, adopting a similar approach aimed at minimizing government expenditures.
The precise terms of the settlement are yet to be disclosed, pending court approval.
