Billionaire Elon Musk and his social media company X, formerly known as Twitter, have reached a tentative settlement with thousands of former employees who sued the company for $500 million (£373 million) in unpaid severance benefits.
According to court documents filed Wednesday in San Francisco, both parties jointly asked the U.S. Court of Appeals to delay an upcoming hearing in order to finalize settlement paperwork.
“The parties have reached a settlement agreement in principle and began negotiating the terms of a long form settlement agreement,” the filing stated.
The lawsuit, led by former Twitter executive Courtney McMillian, claims that about 6,000 employees were wrongly denied severance packages after Musk’s takeover in late 2022. Plaintiffs argue they were entitled to as much as six months of salary and other benefits, but most workers received only one month of pay—while some received nothing at all.
Musk’s Mass Twitter Layoffs
The sweeping layoffs began shortly after Musk acquired Twitter for $44 billion in October 2022. In a bid to cut costs, he eliminated more than half of the company’s workforce, including teams dedicated to trust and safety, human rights, and communications.
The Twitter layoffs set the tone for mass job cuts across the tech industry, with companies such as Meta (Facebook), Google, and Microsoft also slashing tens of thousands of jobs as pandemic-driven hiring booms gave way to economic slowdowns.
Broader Context
Musk’s workforce reductions at X mirrored his earlier approach in government. While briefly appointed to lead the Department of Government Efficiency under former President Donald Trump, Musk made similar moves by cutting thousands of federal positions in an effort to reduce spending.
Details of the X settlement remain confidential and require court approval before they are finalized. The BBC reported that both the company and attorneys for the former workers have declined comment.
Why This Matters
The agreement could mark the end of one of the most closely watched labor disputes in Silicon Valley. It also highlights the continuing fallout from Musk’s turbulent management of Twitter, renamed X, which reshaped the social media landscape and intensified debates over employee rights in the tech sector.