Elon Musk's X Corp Settles $500 Million Severance Lawsuit with Former Twitter Employees
Elon Musk’s X Corp has tentatively settled a $500 million lawsuit over unpaid severance with former Twitter employees laid off after Musk's 2022 acquisition. The settlement stems from allegations that severance pay promised under a 2019 plan was not fully paid.
X Corp (formerly Twitter), owned by Elon Musk, has reached a preliminary agreement to resolve a $500 million class-action lawsuit brought by former Twitter employees claiming they were stripped of severance pay for mass layoffs in 2022. The lawsuit claims the company breached its 2019 severance plan, which said most employees were entitled to two months' base pay plus one week of pay for every full year of work. It said senior employees could be entitled to as many as six months' severance. However, according to the suit, many terminated employees either received no severance or only received one month's pay.
Background of the Lawsuit
The legal enmity arose following Musk's purchase of Twitter late in 2022, when he laid off approximately 6,000 employees—or more than half of Twitter’s staff at the time—in sweeping cutbacks. Former head of Twitter’s employee benefits Courtney McMillian and former operations manager Ronald Cooper, with the help of coworkers, launched the class-action suit in California to recover severance packages that remained unpaid to them as of the time the suit was filed. A federal judge dismissed the suit in July 2024, but the plaintiffs filed an appeal with the Ninth Circuit Court of Appeals, with oral arguments originally scheduled for September 17, 2025.
Settlement Terms and Court Developments
In a joint filing with the court, lawyers representing both X Corp and the former employees on the class-action suit asked the U.S. appeals court to defer the upcoming hearing so that they could finalize settlement terms. Although the terms of the financial settlement and amounts distributed to class members have not been disclosed publicly, the goal of the settlement is to pay workers affected by the layoffs and to dispose of the lawsuit. The court agreed to continue the hearing, marking a rare end to one of many ongoing legal conflicts that all surround Musk’s post-Twitter takeover conduct.
Wider Impact and Ongoing Litigation
This settlement will provide relief to thousands of former Twitter employees who were off-boarded without severance payments from the company's procedures. However, there are still active lawsuits regarding employee terminations and severance payments pending in the state of Delaware and California's courts, as they relate to other former Twitter executives.
