Twitter Sued for Unpaid Severance
On Wednesday, Twitter was sued for allegedly failing to pay at least $500M in promised severance to thousands of employees who were laid off after Elon Musk purchased the platform last year.
Facts
- On Wednesday, Twitter was sued for allegedly failing to pay at least $500M in promised severance to thousands of employees who were laid off after Elon Musk purchased the platform last year.1
- The class-action suit was filed by Courtney McMillan, who was Twitter’s "head of total rewards" and oversaw the company’s employee benefits program before she was let go in January.1
- Musk is accused in the filing of knowing about the severance plan but balking at the "expense" of what became a 6K-employee wave of layoffs following his takeover of the company.2
- Twitter’s April 2022 merger agreement, beginning when Musk first offered to buy the site, stated that within the first year after the completion of the deal, the company would continue to provide workers with severance payments "no less favorable" than ones they received before the sale.3
- But the plaintiffs claim that the employees who were fired were offered "at most" three months' compensation — a fraction of what they were due.3
- This suit follows several others filed against Twitter, including one claiming Twitter failed to pay millions in bonuses to remaining employees, and another claiming the company’s layoffs targeted women and people with disabilities.4
Sources: 1Reuters, 2BBC News, 3Business Insider, and 4Mint.
Narratives
- Narrative A, as provided by Tech. Musk’s leadership of Twitter has gone horrifically, and it seems like the walls are closing in. This latest suit adds to a laundry list of claims against the platform contributing to the company’s financial woes. Meanwhile, Meta has launched its competitor Threads and advertisers are leaving in droves. Musk might drive Twitter right out of existence.
- Narrative B, as provided by FOX News. When Musk purchased Twitter, it was going bankrupt based on arrangements and promises made by prior management. Musk made the necessary staff cuts to save the company and then paid what Twitter could afford in severance without going bankrupt. The former employees should be satisfied under the context of a challenging situation inherited by Musk.
