Tech billionaire Elon Musk and his firm will pay $500 million to former Twitter employees who were fired without severance after he took over the social media platform.
Musk and his social media company, X Corp, reached a tentative agreement to settle the lawsuit, which was filed by 6,000 former Twitter workers who argued that they were owed severance pay. The tech billionaire bought Twitter, now rebranded to X, for $44 billion.
Musk did not meet the end of the bargain for former Twitter employees
Attorneys for X Corp and the former employees revealed the agreement in a Wednesday court filing, with both parties asking a US appeals court to delay an upcoming court hearing to enable them to finalize a deal that would see the fired employees getting paid, in a move that would also end the litigation.
However, the financial terms of the deal were not revealed.
Musk acquired the platform in 2022, which resulted in 6,000 employees – more than half of its total headcount getting laid off. Among the major sweeping changes that came along with the acquisition, Musk rebranded the platform to X.
The proposed class action lawsuit was filed in California by Courtney McMillian, who previously oversaw employee benefits programs for Twitter staffers, and Ronald Cooper, who was an operations manager.
The former employees’ lawsuit claimed that in a severance plan, most Twitter staffers would receive two months of their base salary and one week of pay for each full year they were at the job. However, the social media platform only offered at most one month of severance pay, and many laid-off employees did not receive any additional compensation, according to the lawsuit.
McMillian and other senior employees were guaranteed six months of base pay, per suit. According to reports, the settlement was reached about a month before the suit was set to go before a federal appellate court. A California federal judge previously granted a motion to dismiss the lawsuit in July 2024, and the employees appealed to the San Francisco-based 9th US Court of Appeals.
The company experienced a fair share of drama with Musk’s acquisition
The $44 billion acquisition of Twitter by Musk came with its fair share of drama as the tech billionaire agreed to purchase the platform in April 2022, but later said he was going to back out of the deal.
However, the social media platform had to sue Musk to force him to complete the deal. The tech billionaire eventually closed the deal in October of the same year. Apart from the name change, Musk implemented other sweeping changes, including the firings of employees, among them the then chief executive officer, Parag Agrawal, and other top executives.
The matter also comes amid mounting legal challenges for Musk, who is also facing other lawsuits for misleading customers about his electric vehicle-making firm Tesla’s self-driving capabilities. California legislators and Miami jurors are challenging the tech billionaire over his EV cars in a class action lawsuit against the company, arguing he overpromised and underdelivered in terms of his company.
Additionally, a federal judge also ordered him to face a lawsuit by voters who claim he misled them and exploited their support for a constitutional cause when they signed a petition during the US presidential election.
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Source: https://www.cryptopolitan.com/musks-x-corp-to-pay-500m-for-twitter-workers/
