Musk Hit with $500M Lawsuit from Former Twitter Employees

With competitors gaining ground, will the $500m legal filing prove to be the straw that breaks the bird's back?

A class action lawsuit alleging that Elon Musk owes former Twitter employees $500m in unpaid severance pay has been lodged against the social media company.

The news follows Meta-owned Twitter rival Threads surpassing the 100-million user mark in its first five days on the app store, breaking the record set by ChatGPT in November.

Although Musk’s Twitter experiment has made the headlines almost daily since his 2022 takeover, but there’s an eerie feeling that the walls really are closing in this time as the platform fights fires on all fronts.

Twitter’s Half-a-Billion Dollar Unpaid Severance Bill

Twitter’s former “Head of Total Rewards” Courtney McMillan has filed a class action lawsuit alleging that Twitter owes former employees around $500m in unpaid severance pay, according to several news outlets.

The lawsuit, filed in a San Francisco court, also claims that Musk was aware of the severance plan in place at the social media site before slashing the social media site’s headcount from 7,500 to just 1,800.

Some senior employees that were laid off were supposed to be due at least half a year’s worth of base salary, the complaint alleges, along with an additional week for every year they’d been at the company.

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It’s also alleged that Musk misled staff by giving them the impression that he would honor the severance arrangements already in place.

Twitter’s financial woes have littered the headlines since Musk’s takeover back in November, after which the company was sued in January for refusing to pay rent on its London and San Francisco offices, with the amount due totaling more than $136,000.

Walls Close in on Musk

Getting slapped with a $500m class action lawsuit isn’t exactly ideal at the best of times, not least days after a much larger, rival social media company releases a direct competitor.

Meta timed it well, too, announcing the new app shortly after Musk imposed a limit on the number of accounts that could read posts. Musk has now blocked links to Threads on Twitter.

This is just one example of several poorly-judged changes platform changes Musk has actioned in the past nine months.

Others include removing two-factor authentication for non-paying users and making verification ticks a Twitter Blue subscription feature, the latter of which had to be halted due to a wave of imposter accounts.

Advertisers have walked away from the platform in droves, while a number of studies have shown that hate speech on rose on the platform after Musk’s takeover – although both Twitter and Musk himself strongly dispute this.

What isn’t disputed, however, is that Musk laid off significant proportions of the teams moderating content and monitoring misinformation, reinstated hundreds of banned accounts, and facilitated a slew of top executives being laid off, while many others resigned.

Is this the Start of the End for Twitter?

Although Musk’s social media activity and fire-stoking persona didn’t suggest Twitter would be a roaring success after his $44 billion acquisition of Twitter back in October, few could have thought it would go this horrifically.

It’s always hard to predict exactly when a social media site that has formed such an essential part of the fabric of online discourse will fade away completely – but the avalanche of legal issues and rival apps paints a bleak picture for the billionaire.

Social media platforms tend to die long deaths – MySpace, which exists in relative obscurity, still pools millions of visitors in 2023 – unless they’re culled by their owners.

The staying power of a site the size of Twitter is perhaps among the strongest of sites that were splattered onto the blank social media canvas that was the 2000s internet. It remains at the center of public debate, and breaking news, from all over the world makes its way through its digital corridors, unlike any other platform we currently have available.

Not long ago, it seemed untouchable, but now, daily headlines point to a litany of problems, and the latest lawsuit from disgruntled workers is yet another large thorn in its side.

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Written by:
Aaron Drapkin is's Content Manager. He has been researching and writing about technology, politics, and society in print and online publications since graduating with a Philosophy degree from the University of Bristol six years ago. Aaron's focus areas include VPNs, cybersecurity, AI and project management software. He has been quoted in the Daily Mirror, Daily Express, The Daily Mail, Computer Weekly, Cybernews, Lifewire, HR News and the Silicon Republic speaking on various privacy and cybersecurity issues, and has articles published in Wired, Vice, Metro, ProPrivacy, The Week, and covering a wide range of topics.
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