One of the most spectacular moments in tech history was Elon Musk’s $44 billion acquisition of Twitter in 2022. For months, the transaction was the focus of public controversy and boardroom disputes. Beyond the show, however, the agreement led to a wave of layoffs that impacted thousands of employees. Almost three years later, a conclusion is finally being seen by those employees. Thousands of former employees who were let go without receiving the appropriate severance pay will receive compensation as part of a recent settlement.
This article examines the lawsuit’s history, the promises made to Twitter staff, the court proceedings, and the implications of the settlement for individuals impacted.
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Why Did Twitter Workers Sue Elon Musk?
Musk immediately started transforming Twitter after completing his acquisition of the firm in October 2022. His decision to drastically reduce the staff was one of his first actions. Nearly 6,000 workers, or more than half of the corporation, were reportedly let off in a matter of weeks.
The layoffs were unexpected for individuals who lost their jobs. According to the company’s previous policies, many anticipated receiving severance compensation. Rather, several said they were paid little or nothing at all. They sought justice in the courts after feeling deceived.
According to court documents, the current deal represents a sea change in this protracted legal dispute. Former workers said that Musk and his business, which is now called X Corp., had violated federal labour rules and broken promises to employees.
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Who Led the Lawsuit?
Ronald Cooper, an operations manager, and Courtney McMillian, a former head of Twitter’s employee benefits programs, filed the proposed class-action case in California. They stood in for thousands of workers who claimed that Twitter had not fulfilled its severance obligations.
Fairness and corporate responsibility were at the centre of their case, in addition to lost pay. The plaintiffs claimed that in their quest for cost-cutting measures, Musk’s management ignored workers’ rights.
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What Was Promised in Twitter’s Severance Plan?
The complaint was centred on Twitter’s 2019 severance plan. According to that plan:
- Most employees were entitled to two months of base pay.
- They were also promised an additional week of pay for every full year of service.
- Senior staff, including executives and program heads, were promised six months of base pay.
However, the complaint claims that these restrictions were disregarded when Musk carried out the layoffs. Instead, a lot of workers got severance pay that was either nothing at all or, at most, one month’s worth.
It was a devastating blow to the workers who had spent years on the platform. The breach of trust was more important than money.
How the Legal Battle Unfolded
The legal battle between Musk and X Corp. took almost three years to resolve. The possibility that workers would ever be paid was raised when a federal judge in California once denied a motion.
In spite of these obstacles, the plaintiffs persisted. It was announced in August 2025 that a settlement had been struck in principle, just weeks before the case was set for a hearing before a federal appeal court.
Negotiations for a long-form settlement deal had started on August 19, 2025, according to court filings. The dispute was finally getting close to settlement when both parties jointly asked the appellate court to postpone proceedings.
The settlement, if accepted by the district court, will settle the case completely and put a stop to one of the most well-known employment conflicts in Silicon Valley history.
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How Did Musk’s Takeover Trigger Mass Layoffs?
To comprehend why so many workers were laid off, one needs to reflect on Musk’s contentious acquisition.
- The $44 Billion Purchase: Musk agreed to purchase Twitter in April 2022. However, months later, claiming that the site had misrepresented user data, he made an attempt to leave. In response, Twitter sued Musk to compel him to finalise the transaction.
- Deal Closure: In October 2022, Musk completed the deal despite increasing legal pressure.
- Immediate Firings: Top executives, including then-CEO Parag Agrawal, were fired by Musk within days, and he immediately started implementing widespread departmental layoffs.
Musk defended the layoffs by saying Twitter was overstaffed and unsustainable financially. However, the abrupt terminations and the absence of severance felt like a betrayal to the workers.
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The Human Cost of the Layoffs
The repercussions for the 6,000 employees who lost their employment were severe. A lot of people were abruptly left without a job, health insurance, or a clear path for their career. After moving or forgoing other possibilities to work at Twitter, some employees were fired with no pay.
The toll on the emotions was just as great. Twitter has long been regarded as one of Silicon Valley’s best places to work. Musk’s sudden leadership transition left many workers feeling abandoned.
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The Settlement: What It Means for Former Employees
After the settlement is finalised, about 6,000 impacted workers will get compensation. The accord offers long needed relief for many who waited for justice for years, even though the precise numbers have not been made public.
The agreement also demonstrates the effectiveness of class action lawsuits. Former workers united and held a powerful individual like Musk responsible for what they perceived to be unfulfilled promises.
Crucially, the settlement is a symbolic win in addition to offering monetary recompense. It proves that disregarding employee rights has repercussions, especially in the rapidly evolving tech industry.
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Broader Implications for Tech and Employment Practices
The technology industry as a whole may be impacted by the Twitter settlement. Twitter is not alone in its mass layoffs; in recent years, other industry titans like Meta, Amazon, and Google have also eliminated tens of thousands of workers.
The case underlines how crucial it is to have clear severance rules and how businesses must keep their promises to workers. It serves as a reminder to employees to thoroughly examine contracts and demand accountability when commitments are not fulfilled.
The settlement represents yet another contentious phase in Musk’s ownership of Twitter. Even while he is still dedicated to changing the platform, which is now known as X, the financial and reputational toll of this legal dispute serves as a reminder that even daring businesspeople have a duty to uphold labour laws and corporate commitments.
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Conclusion
One of the most significant moments in contemporary digital history was Elon Musk‘s takeover of Twitter, which was characterised by upheaval, controversy, and ambition. But it was also a very personal tragedy that upended lives and livelihoods for thousands of workers.
Now that a settlement has been reached, former workers are at last getting the money they were promised years ago. It symbolises closure and acknowledgement of their struggle, even though it cannot reverse the hardships they had.
The case serves as a potent reminder that actual individuals whose lives are at stake are at the heart of every corporate takeover and reorganisation. Even the most powerful people in technology can be held responsible when those individuals fight back.