Elon Musk does not owe ex-Twitter staffers $500 million in severance, court rules
- by TechCrunch
- Jul 10, 2024
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— Elon Musk (@elonmusk) November 4, 2022
U.S. District Judge Trina Thompson dismissed the class action lawsuit in San Francisco on Tuesday.
In a court filing, Judge Thompson said the ERISA protections did not apply because Musk’s company notified employees shortly after the October 2022 takeover that fired employees would only receive cash payouts. Because of this notice, the mass firings that occurred in November were not under Twitter’s previous severance plan, according to the judge.
“We are disappointed in the ruling and considering our options for moving forward,” said a spokesperson for Sanford Heisler Sharp, the law firm representing the plaintiffs in this case, in an email to TechCrunch.
Since the November 2022 firings, X Corp. has operated the social media platform with a bare-bones staff. Musk told the BBC in 2023 that he brought Twitter’s staff down to 1,500 employees, from roughly 8,000 before his takeover, citing major cost-cutting efforts. Despite the efforts, X has continued to struggle, as documents obtained by Bloomberg showed the company lost $456 million in the first quarter of 2023.
Musk is not out of the water yet for these mass firings. In another lawsuit, Agrawal and three other former Twitter Inc. executives are seeking $128 million in severance payments from X Corp. after they were let go in the mass firing. Another lawsuit from former senior employees at Twitter seeks more than $1 million in severance payments, but Musk says he never agreed to these former employees’ benefit plans.
This article was updated on July 10 at 12:48 PM PDT to include comments from Sanford Heisler Sharp.
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