New Delhi: Elon Musk, the CEO of Twitter, and Twitter are being sued for failing to provide the tens of thousands of sacked employees with the $500 million in severance money promised. In January 2023, Courtney McMillian, a former employee of Twitter’s HR division, filed a class-action lawsuit in federal court in San Francisco. Several lawsuits against Musk for mass firings following his takeover of Twitter last year have been filed.
As per the lawsuit, the company fired over 6,000 people. Musk slashed over 80 per cent of the Twitter staff, including its then-CEO Parag Agrawal, since October 2022.
Before beginning to fire employees, Musk was allegedly aware of the company’s severance arrangement, according to the lawsuit. According to the case, Twitter’s severance plan provides its fired employees with at least two months of base pay and a cash contribution towards health insurance and other benefits. Additionally, it states that workers in senior positions were entitled to six months of basic income and one week for every complete year of experience.
Twitter is charged with paying the sacked employees “at most” three months’ wages. These three months contained two months of compensation to comply with a US statute requiring employers to give employees notice of termination, as well as one month of severance money. Twitter is accused of firing workers without notifying them of the severance plan adjustments or providing them with any employee benefits to which they were legally entitled. According to the lawsuit, all employees must receive their vested restricted stock units, bonuses, a financial contribution towards their health insurance, and three to six months of outplacement services.
Back in November, Musk tweeted, “Everyone exited was offered 3 months of severance, which is 50 per cent more than legally required.”
Due to widespread layoffs after Musk took over as CEO of the social media business, Twitter is dealing with several related litigation. In one of the complaints, it is alleged that the company discriminated against women and people with disabilities. Twitter has, however, categorically denied any misconduct in the cases.
Notably, Musk claimed that many people seemed to have little worth prior to his takeover of the firm in a virtual interview with the Wall Street Journal at the CEO Council Summit in London. Therefore, he decided to eliminate jobs, which increased production.