Musk Twitter severance settlement nears finalization as X agrees to pay ex-employees in $500m dispute over layoffs

Musk Twitter severance settlement negotiations have reached a breakthrough, with billionaire Elon Musk and his social media company X (formerly Twitter) agreeing to a tentative $500 million deal to resolve a major lawsuit filed by thousands of former employees.

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In a joint court filing submitted in San Francisco on Wednesday, legal teams for both sides requested the postponement of an upcoming appeals hearing to finalize what they described as a “settlement agreement in principle.” The terms remain confidential and are subject to court approval.

The lawsuit, led by ex-Twitter employee Courtney McMillian, alleged that about 6,000 workers were unfairly denied benefits under Twitter’s pre-existing severance plan.

Plaintiffs say they were promised up to six months’ salary and additional benefits, but instead received only one month—or in some cases, nothing at all.

The mass firings followed Musk’s $44 billion acquisition of Twitter in 2022, where he immediately initiated deep cost-cutting measures, laying off over half the company’s workforce.

Entire teams—especially those focused on trust and safety, media policy, and human rights—were dismantled.

Twitter’s sweeping layoffs were among the first in a wave of tech-sector cuts that later affected Meta, Google, Microsoft, and others as they recalibrated after aggressive pandemic-era hiring.

The $500 million dispute became one of the highest-profile severance battles in Silicon Valley and represents a major moment of accountability for Musk, who has frequently defended his corporate shakeups as necessary “efficiency reforms.”

While the agreement marks a significant development, finalization still hinges on the formalization of long-form settlement documents and judicial sign-off.

“The parties have reached a settlement agreement in principle and began negotiating the terms,” the court filing noted.

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This latest case joins a string of lawsuits involving Musk, including a recent one involving OpenAI and another concerning alleged voter fraud petition scheme.