Elon Musk owes $500 million severance pay to Twitter, claims lawsuit

The lawsuit accuses Twitter of paying employees no more than one month of severance pay, with many receiving nothing at all. Credit: REUTERS

Twitter faces legal action over alleged debt of around $500m (£385m) in severance pay promised to thousands of workers laid off by Elon Musk.

Twitter is accused in the lawsuit of paying employees no more than one month's severance pay. , and many received nothing at all.

Mr. Musk has fired more than half of Twitter's 7,500 employees since acquiring the social network for $44 billion last year.

The class action lawsuit was filed in San Francisco federal court by former human resources chief Courtney McMillian, who ran Twitter employee incentive programs before being fired in January.

She argued that under the severance pay plan developed by Twitter in 2019, most workers were to receive two months of base salary plus one week of pay for each full year of service.

Meanwhile, senior employees, including Ms McMillian was allegedly promised a six-month base salary.

Mr Musk is said to have known about the severance pay prior to the mass layoffs, according to BBC News.

Formerly the world's richest man stated that “all dropouts were offered [three] months of severance pay, 50% more than required by law.”

This isn't the first time former employees have taken to Twitter since Musk took over.

Last month, former compensation director Mark Schobinger filed a class-action lawsuit against Twitter for allegedly not paying millions of dollars. in bonuses promised to employees. Twitter said the claims were unfounded.

Meanwhile, 43 former UK employees threatened to sue Twitter in January for allegedly conducting a “sham firing process.”

They said Twitter was being fired workers without due process, being disconnected from their computers and locked in offices, before being retroactively given a formal redundancy consultation.

UK employees were offered two months' base salary plus two weeks' wages. for every year they've been with the company, according to the Financial Times.

Twitter has experienced several major outages and downtime as Musk laid off thousands of workers, including engineers, as part of cost cuts. measures.

We reached out to Twitter for comment.