Social media firm X and its owner Elon Musk have reached a settlement with some of its former employees who had sued for $500m (£373m) in severance pay.
Details of the agreement are not yet public and will require the approval of the courts.
In addition to the group action, there are more than 2,000 individual arbitration cases over unpaid severance stemming from Musk’s takeover of Twitter (now called X) in November 2022, after the billionaire dismissed more than 6,000 people, over half of the company’s workforce.
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“The parties have reached a settlement agreement in principle and began negotiating the terms of a long-form settlement agreement,” according to court documents filed by both sides.
The lawsuit, led by former Twitter employee Courtney McMillian, claimed that about 6,000 people were wrongly denied benefits under the company’s severance plan.
The firm had failed to provide payments as high as six months’ worth of salaries, among other terms, stated the claim.
Twitter had only given sacked workers at most one month of severance pay, while some former employees did not receive anything, according to the lawsuit.
The parties filed a joint request to delay an upcoming appeal hearing, scheduled for 17 September, to enable them to finalise the settlement agreement. The settlement would resolve the dispute, which began with a July 2023 lawsuit and was followed by an initial dismissal by a federal judge in July 2024 before being appealed.
The announcement that fired workers in November 2022 said: “In an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global workforce on Friday.”
Twitter also said that its offices will be temporarily closed and all staff access will be suspended in order “to help ensure the safety of each employee as well as Twitter systems and customer data”.
“We recognise this will impact a number of individuals who have made valuable contributions to Twitter, but this action is unfortunately necessary to ensure the company’s success moving forward,” it added.
A number of former Twitter executives still have cases pending. These include CEO Parag Agrawal, chief financial officer Ned Segal, head of legal Vijaya Gadde and general counsel Sean Edgett. Among their allegations is that Musk had acted in revenge against them personally. A district judge refused to dismiss the case in November 2024.
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