Elon Musk and X settle $500M severance dispute with ex-Twitter employees

Elon Musk and his social media company X have reached a tentative settlement with former Twitter employees who had sued for $500 million in severance pay. According to court filings on Wednesday, both sides informed the U.S. appeals court in San Francisco that they had agreed in principle and requested a delay of an upcoming hearing to finalize the settlement paperwork. The lawsuit, led by ex-employee Courtney McMillian, alleged that around 6,000 staff were wrongly denied severance benefits after being laid off in 2022, shortly after Musk acquired Twitter. The workers claimed they were entitled to as much as six months of salary and additional benefits under the company’s severance plan. Instead, most terminated staff reportedly received only one month of pay, while some were not compensated at all.

The mass layoffs were part of Musk’s cost-cutting measures, which saw Twitter — rebranded as X — lose more than half of its workforce, including trust and safety, human rights, and media teams. The agreement’s details have not yet been disclosed and remain subject to court approval. Musk’s sweeping job cuts at Twitter marked the beginning of broader downsizing trends across the tech sector. Major companies such as Meta, Google, and Microsoft also implemented large-scale layoffs in the years following the pandemic hiring boom. Earlier this year, Musk oversaw similar workforce reductions while briefly serving in the U.S. government’s Department of Government Efficiency, where he was tasked with trimming federal spending and jobs.