Elon Musk's X (Twitter) Lawsuit: $500M Severance Case Update

Settlement Reached in Twitter Severance Lawsuit

Former employees of Twitter, now known as X, who were terminated following Elon Musk’s acquisition of the platform, may soon be receiving owed severance payments. A tentative settlement has been proposed in a class action lawsuit brought against X by impacted workers.

Details of this development emerged through a court document requesting a postponement of an impending hearing. This delay is intended to allow both sides to finalize the terms of an agreement.

Mass Layoffs Following Acquisition

Upon acquiring Twitter in 2022, Elon Musk initiated substantial workforce reductions, resulting in the dismissal of over 6,000 employees. This represented approximately an 80% decrease in the company’s total staff.

Although a severance package of three months’ pay was initially offered, the lawsuit alleges discrepancies in its distribution. Many former staff members reportedly did not receive the full amount they were entitled to, and some received no compensation whatsoever.

Dispute Over Severance Terms

The legal action further contends that the offered three-month severance fell short of expectations based on a pre-existing Twitter severance policy established in 2019. This prior plan stipulated severance benefits of up to six months’ salary for senior personnel, alongside an additional week’s pay for each year of service.

A previous ruling in July by a U.S. District Judge in San Francisco determined that Musk was not legally obligated to uphold the original severance agreements. However, this decision was appealed by the plaintiffs.

Hearing Delayed for Settlement Discussions

Oral arguments were scheduled to be presented to a court of appeals next month. However, both parties have now requested a delay to these proceedings to facilitate ongoing settlement negotiations.

X is working towards resolving the outstanding claims with the former employees.

Interested in contributing to the improvement of TechCrunch’s reporting? Your feedback is valuable! Complete this survey to share your thoughts and potentially win a prize.