Billionaire Elon Musk and his social media company X have reportedly reached a preliminary settlement with former employees who filed a lawsuit seeking $500 million (£373 million) in severance pay. A court filing submitted on Wednesday indicates that both parties have requested the US appeals court in San Francisco to delay an impending hearing to allow for the completion of the settlement documentation.
The lawsuit was initiated by several former employees after Musk’s acquisition of the company in 2022, which resulted in the termination of approximately 6,000 workers, accounting for more than half of the workforce as part of a cost-reduction strategy. The lawsuit, led by former Twitter employee Courtney McMillian, alleges that many individuals were wrongly denied benefits from the severance plan. Employees contend that the company failed to provide severance payments that could reach up to six months’ worth of salaries, with some workers receiving only a month of pay or nothing at all.
The specifics of the settlement have not yet been made public and will require judicial approval. Musk’s actions at Twitter paralleled retrenchments across the tech industry, where companies like Facebook, Google, and Microsoft also reduced staff following initial hiring surges during the early pandemic. It raises questions about the evolving landscape of employment in the tech sector as firms seek to adjust to changing economic conditions.
Musk’s previous experience includes a brief tenure directing efforts to reduce spending and personnel within the US government under President Donald Trump, further adding context to ongoing discussions regarding workforce management in technology and beyond. The BBC has reached out to both X and the legal representatives for the former employees for additional comments.
Source: https://www.bbc.com/news/articles/c1ejq154nqzo?at_medium=RSS&at_campaign=rss