Elon Musk and his social media company X have reached a tentative settlement with former employees who sued for \$500 million (£373m) in severance pay. The lawsuit, led by Courtney McMillian, involved around 6,000 workers—more than half of Twitter’s workforce—laid off after Musk’s 2022 takeover. The employees claimed they were wrongly denied benefits, including payments of up to six months’ salaries, while Twitter provided at most one month or nothing. The settlement is subject to court approval, and the parties have requested a hearing delay to finalize the paperwork. The layoffs affected global teams, including trust and safety, human rights, and media, and reflect broader cost-cutting trends in tech and Musk’s previous workforce reductions in government roles.
Billionaire Elon Musk and his social media company X have agreed on a tentative settlement with former employees who sued for \$500m (£373m) in severance pay.
The deal was reported in a court filing on Wednesday, with both parties jointly asking the US appeals court in San Francisco to postpone an upcoming hearing to finalize the settlement paperwork.
Some 6,000 staff—more than half of Twitter’s workforce—were laid off as part of cost-cutting measures after Musk took over the company in 2022, prompting lawsuits over terminations and severance packages.
Court documents state, “The parties have reached a settlement agreement in principle and began negotiating the terms of a long form settlement agreement.”
The lawsuit, led by former Twitter employee Courtney McMillian, claims roughly 6,000 people were wrongly denied benefits under the company’s severance plan, including payments of up to six months’ salaries.
Twitter reportedly provided at most one month of severance pay, and some employees received nothing, according to the suit.
Musk’s layoffs affected thousands globally, downsizing Twitter’s trust and safety, human rights, and media teams.
This move mirrored earlier retrenchments across tech firms aiming to cut costs after hiring surges during the early Covid-19 pandemic.
Elon Musk, who briefly led President Trump’s Department of Government Efficiency, also cut thousands of federal jobs in a similar effort to reduce government spending.
