ultimateimp – Elon Musk’s social media platform X has agreed to settle with thousands of former employees who sued after Musk dismissed them following his 2022 takeover. At that time, the company still operated under the name Twitter.
After Musk acquired the company, he laid off nearly 60% of the workforce. Including almost the entire content moderation and communications teams. These massive layoffs prompted lawsuits claiming that about 6,000 former employees are collectively owed $500 million or more in severance pay.
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The plaintiffs, including Courtney McMillian, former Head of People Experience, and Ronald Cooper. A former operations manager, alleged that the company failed to properly notify staff about changes to their severance plan. They also claimed the company did not honor the severance package that existed before Musk’s acquisition.
In July 2024, the court dismissed the case initially. However, the judge permitted McMillian to file an amended lawsuit, and a federal appellate court scheduled it for review the following month, according to Bloomberg Law.
The lawsuit states that the company promised employees two months of base pay plus an additional week for every year worked. Yet, the company paid many employees only one month’s pay, which fueled the dispute. This settlement marks a significant step in resolving employment disputes stemming from Musk’s leadership changes. But it does not close the chapter on all related lawsuits.
Ongoing Legal Challenges Highlight Complexities of X’s Post-Acquisition Transition
The severance lawsuit is not the only legal issue facing X following Musk’s takeover. In 2024, several former Twitter executives, including CEO Parag Agrawal, Chief Financial Officer Ned Segal, Chief Legal Counsel Vijaya Gadde, and General Counsel Sean Edgett, filed a separate suit. They claimed the company owed them more than $128 million in unpaid severance.
Beyond employment matters, X is under scrutiny for potential criminal investigations in France. French authorities are reportedly probing allegations of “organized interference” linked to the platform’s operations.
Additionally, X faces a lawsuit accusing it of negligence in handling child sexual abuse material (CSAM). The lawsuit alleges the company delayed its response to reports of harmful content. Raising serious concerns about content moderation practices under Musk’s leadership.
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These ongoing challenges highlight the complexities of managing a major social media platform amid rapid ownership changes and restructuring. Musk’s vision for X has involved aggressive cost-cutting and operational shifts, which have sparked controversy and legal action.
As the platform continues to evolve, its ability to address legal, ethical, and operational issues will be critical. The settlement with former employees may offer some relief, but broader questions about governance and responsibility remain unresolved. Stakeholders and users alike will watch closely as X navigates these challenges and attempts to rebuild trust while pursuing Musk’s ambitious goals for the platform.
