Elon Musk’s X nears a settlement in $500M severance pay suit

Former X employees who were affected by the infamous mass layoffs that occurred after Elon Musk's Twitter takeover might finally get their severance pay. Some laid-off employees joined a class-action lawsuit against X (which was then called Twitter), claiming they never received the severance pay owed to them.

According to a court document filed earlier this week, the parties are nearing a settlement agreement in the $500 million class action lawsuit. Both parties filed a joint motion to postpone upcoming oral arguments "pending the finalization and administration of an imminent class-wide settlement agreement. The filing further states that the settlement will "include a proposed distribution of funds to the members of the settlements class(es).

In October 2022, Elon Musk officially took over X and moved quickly to lay off over 70 percent of the workforce. Former staffers subsequently filed a lawsuit claiming they received only a month of severance pay or, in some cases, no severance at all.

The lawsuit accused X of violating its severance policy, which offered two months of base pay and an additional week for every year they'd worked at the company. More recently, the court dismissed the case, but gave the plaintiffs a chance to amend their complaint and appeal the ruling. Now, the parties have come to a tentative agreement.

Exactly how much money the plaintiffs could receive is unclear. But the initial lawsuit claimed the former employees were collectively owed $500 million in severance pay.

"If the district court approves this proposed distribution," the filing said, "the agreement will resolve the litigation in its entirety and moot this appeal."