Lawsuit Claims Twitter Owes Over Half a Billion Dollars in Severance Pay Following Musk-Led Acquisition

A lawsuit filed on Wednesday alleges that Twitter is liable for at least $500 million in severance pay owed to thousands of employees who were laid off when an investor group led by Elon Musk acquired the company last year.

The class-action lawsuit was filed in a San Francisco-based federal court by Courtney McMillian, Twitter’s former “head of total rewards” responsible for overseeing the company’s employee benefits programs. McMillian, who was laid off in January, seeks damages of at least $500 million on behalf of the affected employees.

According to the lawsuit, Twitter’s severance plan, established in 2019, promised that laid-off workers would receive two months of their base salary plus one week of pay for each full year of service at the social media platform. Senior employees like McMillian were allegedly entitled to six months of base pay. However, the lawsuit claims that Twitter only provided a maximum of one month in severance pay to those affected by the layoffs that followed Musk’s takeover, with many employees receiving nothing at all.

The lawsuit accuses Twitter of violating a federal law regulating employee benefit plans, distinguishing it from another lawsuit in which Twitter was sued for breach of contract regarding severance payments. Twitter has countered these claims, stating that it had paid its former employees in full.

Last year, shortly after the Musk-led investor group completed its purchase of Twitter, approximately half of the company’s 7,500-person workforce was laid off. Musk defended the cuts as necessary to prevent bankruptcy, as Twitter was reportedly losing about $4 million per day at the time.

In addition to the severance pay lawsuit, Twitter is currently facing legal action from employees claiming tens of millions of dollars in unpaid bonuses and allegations of discrimination against women and workers with disabilities. Twitter has denied any wrongdoing in the cases where it has responded.

The outcome of the lawsuit will be closely watched as it highlights the ongoing legal battles and financial obligations faced by Twitter in the aftermath of the Musk-led acquisition.