Elon Musk’s Twitter apparently owes former employees over $500 million in severance pay. Most employees were apparently given only a fraction of what they were owed, whereas some were not paid anything at all, allegedly. Musk is facing several lawsuits over the layoffs
A former executive in the human resources department at Twitter has alleged that the company failed to pay approximately $500 million (£385 million) in severance pay owed to former employees.
Courtney McMillian, who previously served as Twitter’s “head of total rewards,” before she was laid off, made this claim in a class-action lawsuit. The lawsuit asserts that Twitter owner Elon Musk was aware of Twitter’s severance policy before terminating thousands of employees but hesitated due to the associated costs.
This lawsuit is one of several legal actions filed against the company following the extensive layoffs that occurred after Musk’s acquisition of Twitter for $44 billion (£34 billion) last year. According to the lawsuit, approximately 6,000 individuals were ultimately affected by the layoffs.
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As per Twitter’s severance policy, junior employees were entitled to receive at least two months of base salary as severance pay, along with a cash contribution towards health insurance and other benefits.
The complaint, filed in federal court in San Francisco, reveals that individuals in more senior positions, including McMillian, were owed six months of base salary in severance pay, plus an additional week for each full year of experience. However, terminated staff like her received a maximum of three months of pay, which included one month of severance and an additional two months of pay to comply with a US law which mandated notice for layoffs.
This amount received by employees was a mere fraction of the $500 million they were entitled to, according to the complaint. Musk had previously stated in November, following a series of mass layoffs, that employees would receive three months’ worth of pay. He went on to say that this was “50 per cent more than legally required.”
The complaint accuses Musk of deceiving employees regarding the company’s commitment to honouring the severance plan, causing some individuals to remain at the firm longer than they would have otherwise.
Kate Mueting, the attorney representing McMillian from Sanford Heisler Sharp, stated that Musk initially assured employees that Twitter would continue to abide by the severance plan. These promises were apparently made with the knowledge that they were crucial to preventing mass resignations that could have jeopardized the merger’s viability and the vitality of Twitter itself.
