Elon Musk, the billionaire owner of Twitter, came to a preliminary settlement on that very case just last month. This settlement follows the company having fired thousands of employees in multiple large-scale layoffs. When Musk purchased the platform in 2022, he quickly shifted the culture of the app. In response, he cut 6,000 employees globally. Musk’s decision was consistent with his general approach to improve budgetary efficiency. He gutted Twitter’s trust and safety, human rights, and media teams.
As part of the settlement, the former employees agreed to drop a $500 million severance pay lawsuit against the company. They argue the firm failed to pay sufficient wages post fired. Some of the recently laid-off employees were not given any severance pay, and for others, it was as little as a month’s pay at most. The suit argued that the employees were owed wages because of the sudden terminations. These payments, which are referred to as a “redhand,” could be up to six months’ worth of salaries.
In recent court documents, both sides confirmed that they had “reached a settlement agreement in principle and began negotiating the terms of a long form settlement agreement.”
Musk’s management style has come under intense scrutiny, especially considering his former expertise in executing major rounds of layoffs. According to reports from this spring, he implemented deep cuts across his workforce. He did all of this shortly after being appointed to run President Donald Trump’s Department of Government Efficiency. This experience no doubt informed his decision-making during his brief tenure at Twitter. Rank-and-file workers often experienced the brunt of layoffs first.
Twitter has experienced massive cuts since Musk took over. His company, X, is doing everything it can to keep workforce morale high and maintain operational stability. The idea of downsizing these critical teams should greatly alarm everyone. It threatens to tip the balance against the future of content moderation and user safety on the platform.
To that end, after the settlement announcement was made public, both parties requested to cancel the next scheduled hearing. They require more time to work out the terms of the settlement. This delay reflects the ongoing negotiations and underscores the importance of resolving these issues amicably.