Billionaire Elon Musk and his social media firm X have reached a tentative settlement with thousands of former employees who sued for $500 million (£373m) in severance pay following mass layoffs after Musk’s 2022 takeover of Twitter.
According to a joint court filing in San Francisco on Wednesday, the parties requested the US appeals court to postpone an upcoming hearing to allow time to finalise the agreement.
“The parties have reached a settlement agreement in principle and began negotiating the terms of a long form settlement agreement,” the filing stated. Details of the deal remain confidential and require court approval.
The lawsuit, led by former Twitter employee Courtney McMillian, alleged that about 6,000 workers were wrongfully denied benefits under the company’s severance plan. Plaintiffs claimed they were entitled to payments of up to six months’ salary and other benefits, but Twitter only provided one month of severance and in some cases, nothing at all.
The layoffs came shortly after Musk’s $44 billion acquisition of Twitter, when he axed more than half the workforce about 6,000 employees worldwide in sweeping cost-cutting measures. Teams focused on trust and safety, human rights, and media operations were among the hardest hit.
The mass firings at Twitter were among the earliest in a wave of tech industry job cuts, as companies such as Meta, Google and Microsoft also slashed tens of thousands of roles after aggressive hiring during the Covid-19 pandemic.
Musk has made similar moves beyond the private sector. Earlier this year, while briefly leading the US government’s Department of Government Efficiency under former President Donald Trump, he reportedly cut thousands of federal jobs in a drive to reduce spending.
Erizia Rubyjeana
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