Elon Musk’s social media platform, X, has agreed to settle disputes with thousands of former employees who lost their jobs after his takeover of Twitter in 2022. The settlements bring to a close one of the longest-running battles since Musk’s $44 billion purchase of the company. That takeover saw mass layoffs and years of arguments over unpaid benefits.
Court documents filed this week in the U.S. Court of Appeals for the Ninth Circuit in San Francisco confirmed that both sides had reached a settlement “in principle”. Lawyers are now working on the final terms. The exact figure has not been disclosed. The class-action lawsuit at the centre of the dispute sought around $500 million in severance pay, according to The New York Times.
The case was led by former Twitter employee Courtney McMillian. She argued that nearly 6,000 workers were denied benefits promised under the company’s severance plan. Employees had expected packages of up to six months’ salary. In reality, most received only one month’s pay. Some workers received nothing at all, according to the BBC.
The dispute dates back to Musk’s first weeks as owner of Twitter, when he moved quickly to cut costs. Within months, the company’s workforce dropped from about 7,500 to fewer than 2,000. Entire teams were dismantled. This included staff responsible for trust and safety, human rights and communications, etc. The cuts raised concerns about the stability and governance of the platform.
In addition to the class-action case, the company has also reached an agreement with more than 2,000 former staff who pursued claims through arbitration. People familiar with the matter told The New York Times that the deal is expected to cover almost all outstanding severance payments, including interest.
The settlements mark a notable change for Musk. He had previously resisted large payouts and contested his obligations under the severance plan made during the acquisition. By choosing to settle, he appears intent on closing a costly and damaging chapter of his ownership. Other disputes, however, continue.
One of the most significant remaining cases involves former senior executives. They are seeking $128 million in severance, and that lawsuit is still ongoing.
The Twitter layoffs were among the first in a wave of mass job cuts across Silicon Valley. Tech giants, including Meta, Google and Microsoft, also reduced headcounts after aggressive hiring during the Covid-19 pandemic. Musk’s move, however, was one of the most abrupt and sweeping. It reduced the company to a fraction of its former size almost overnight.