Elon Musk’s $500 Million Twitter Settlement Sparks Market Buzz

Tech titan Elon Musk and his company just agreed to a staggering $500 million settlement over Twitter's controversial mass firings—proving once again that in Silicon Valley, even failure comes with a premium price tag.

The payout, one of the largest in tech history, puts a dollar figure on Musk's infamous 'hardcore' restructuring strategy. Employees who got the axe are now getting the last laugh—along with a serious payday.

Wall Street analysts are already calling it a 'disruption tax'—because when you're the world's richest person, apparently half a billion is just the cost of doing business differently. Meanwhile, traditional CEOs are still firing people via Zoom and hoping nobody notices.

It’s almost poetic: the same guy who wants to colonize Mars can’t quite figure out Earth-level employment law. Maybe next he’ll settle a lawsuit with Dogecoin?

Musk did not meet the end of the bargain for former Twitter employees

Attorneys for X Corp and the former employees revealed the agreement in a Wednesday court filing, with both parties asking a US appeals court to delay an upcoming court hearing to enable them to finalize a deal that WOULD see the fired employees getting paid, in a move that would also end the litigation.

However, the financial terms of the deal were not revealed.

Musk acquired the platform in 2022, which resulted in 6,000 employees – more than half of its total headcount getting laid off. Among the major sweeping changes that came along with the acquisition, Musk rebranded the platform to X.

The proposed class action lawsuit was filed in California by Courtney McMillian, who previously oversaw employee benefits programs for Twitter staffers, and Ronald Cooper, who was an operations manager.

The former employees’ lawsuit claimed that in a severance plan, most Twitter staffers would receive two months of their base salary and one week of pay for each full year they were at the job. However, the social media platform only offered at most one month of severance pay, and many laid-off employees did not receive any additional compensation, according to the lawsuit.

McMillian and other senior employees were guaranteed six months of base pay, per suit. According to reports, the settlement was reached about a month before the suit was set to go before a federal appellate court. A California federal judge previously granted a motion to dismiss the lawsuit in July 2024, and the employees appealed to the San Francisco-based 9th US Court of Appeals.

The company experienced a fair share of drama with Musk’s acquisition

The $44 billion acquisition of Twitter by Musk came with its fair share of drama as the tech billionaire agreed to purchase the platform in April 2022, but later said he was going to back out of the deal.

However, the social media platform had to sue Musk to force him to complete the deal. The tech billionaire eventually closed the deal in October of the same year. Apart from the name change, Musk implemented other sweeping changes, including the firings of employees, among them the then chief executive officer, Parag Agrawal, and other top executives.

The matter also comes amid mounting legal challenges for Musk, who is also facing other lawsuits for misleading customers about his electric vehicle-making firm Tesla’s self-driving capabilities. California legislators and Miami jurors are challenging the tech billionaire over his EV cars in a class action lawsuit against the company, arguing he overpromised and underdelivered in terms of his company.

Additionally, a federal judge also ordered him to face a lawsuit by voters who claim he misled them and exploited their support for a constitutional cause when they signed a petition during the US presidential election.

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