09-02-2025
Elon Musk and his social media platform “X” have reached a tentative settlement with former employees. After Musk bought X in 2022, he cut its total workforce from about 7,500 employees to 2,000 employees. Some of those fired employees brought a class-action lawsuit in 2023, arguing that Musk owed them about $500 million in severance payments based on the company’s severance plan. Courtney McMillian, the lead plaintiff, oversaw Twitter’s employee benefits program. They argued X owed them payments as high as six months' worth of salaries, in addition to other terms. X had given the fired workers one month's pay, at most, with some workers not receiving any severance. A federal judge dismissed the lawsuit in July 2024. The Ninth Circuit Court of Appeals had oral arguments scheduled for September to hear the appeal.
X has agreed to settle the case. This decision was seemingly a change for Musk. X had fought with these former employees for several years over the issue of whether it owed them any severance benefits. An X representative told the BBC, “The parties have reached a settlement agreement in principle and began negotiating the terms of a long-form settlement agreement.” The details have not been made public and will require approval from the court. X has also reached a settlement with the 2,000 employees fighting for severance in arbitration. While the details of that settlement have not been shared, sources told the New York Times that the amount should cover most of the severance payments for those workers, including interest. X’s ongoing lawsuit with former senior Twitter executives over severance payments, estimated to be $128 million, continues.