In a significant development for both former employees and the tech industry, Elon Musk's social media platform, X, has reached a tentative settlement with a group of its former workers who had filed a lawsuit demanding $500 million in severance pay. The agreement, reported in a court filing on Wednesday, halts an impending appeal hearing in the US court in San Francisco as both parties work out the details.
The lawsuit, spearheaded by former Twitter employee Courtney McMillian, contended that approximately 6,000 employees were unjustly denied severance benefits after being laid off in a cost-cutting effort shortly after Musk’s takeover in 2022. According to court documents, most of these workers received only a month of severance pay, with some receiving none, despite the company's severance policy suggesting higher payouts.
The impact of these layoffs has been profound, reflecting a trend seen across the tech industry where many companies have made significant cuts since the pandemic. Notable firms, including Facebook, Google, and Microsoft, also retrenched thousands as they adjusted to the post-pandemic digital landscape. Musk had been known to implement similar layoff strategies during his brief leadership at the Department of Government Efficiency under the Trump administration, where the focus was on reducing federal spending and workforce.
As the settlement details remain under wraps pending court approval, it marks an important moment for those affected by the layoffs and those navigating the volatile job landscape in the tech sector. More updates are expected as the terms are finalized and made public.
