X Agrees to Settle $500M Class Action Lawsuit Over 2022 Layoffs

Elon Musk’s X has agreed to settle with thousands of former employees who sued the company after they were dismissed following Musk’s 2022 takeover. Following a decision by the Ninth US Circuit Court of Appeals in San Francisco, the upcoming hearing scheduled for September has been postponed.

The company, then known as Twitter, laid off almost 60% of its employees in the immediate aftermath of Musk’s 2022 takeover, affecting nearly the entire content moderation and communications teams.

The exact size of the payouts has not been disclosed.

The news comes after the class-action lawsuit, initially dismissed in July 2024, was appealed. The suit alleged that 6,000 former Twitter employees were owed $500 million or more in collective severance pay. It was brought by Courtney McMillian, the company’s former Head of People Experience, and Ronald Cooper, a former operations manager. They claimed that X failed to adequately inform staff about changes to their severance plan and did not adhere to the plan in place before Musk bought Twitter.

Employees were originally promised two months of base pay, with an additional week for every year they had been at the company, according to the filing. However, the lawsuit alleged that employees, in many cases, received only one month’s pay.

Despite the apparent end of this case, this isn’t the end of X’s employment disputes. In 2024, some of Twitter’s former top brass, including CEO Parag Agrawal, Chief Financial Officer Ned Segal, Chief Legal Counsel Vijaya Gadde, and General Counsel Sean Edgett, filed a separate lawsuit claiming they were owed more than $128 million in unpaid severance.

Meanwhile, X’s legal issues in other areas show no signs of disappearing quickly. The platform faces the threat of a criminal investigation in France for alleged “organized interference,” as well as a revived lawsuit alleging X was negligent in its handling of child sexual abuse material (CSAM) and slow-walked its response to reports.

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About Will McCurdy

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I’m a reporter covering weekend news. Before joining PCMag in 2024, I picked up bylines in BBC News, The Guardian, The Times of London, The Daily Beast, Vice, Slate, Fast Company, The Evening Standard, The i, TechRadar, and Decrypt Media.

I’ve been a PC gamer since you had to install games from multiple CD-ROMs by hand. As a reporter, I’m passionate about the intersection of tech and human lives. I’ve covered everything from crypto scandals to the art world, as well as conspiracy theories, UK politics, and Russia and foreign affairs.

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