Twitter is being sued after Elon Musk announced that he was cutting 50% of the workforce.
- After acquiring Twitter last week Elon Musk has begun making his mark on the company starting with massive job cuts.
- He fired everyone on the Twitter board and many top executives with his next step—cutting 50% of Twitter’s remaining employees.
- After his plans of firing around 3,700 employees was announced to the company Twitter was hit with a class-action lawsuit.
Why it’s news
Last week Elon Musk acquired Twitter for $44 billion, since the deal was finalized Musk has been sweeping the platform clean by making many changes.
One of his biggest changes was firing a majority of the workforce. He started by laying off the entire Twitter board and followed by letting go of many executives tied to the company.
After that he decided to cut about 50% of Twitter’s remaining employees which is about 3,700.
His reasoning behind the large firing spree is to cut down costs. Musk alleges that he paid too much for the company saying markets were much better when he made his original offer in April.
He planned to cut the 3,700 employees by the end of the workweek, but instead he was hit with a class-action lawsuit. The lawsuit was filed because employees alleged that Twitter is firing them without enough of a notice in violation of federal and California law.
The federal Worker Adjustment and Retraining Notification Act says large companies cannot have huge layoffs without at least 60 days of advance notice to employees, which Twitter did not do.
Musk said he would give fired employees 60 days worth of severance pay, but that did not stop them from filing the suit.
The lawsuit asks the court to issue an order requiring Twitter to obey the WARN Act, and restricting the company from soliciting employees to sign documents that could give up their right to participate in litigation, according to Bloomberg writer Josh Eidelson.
Not Musk’s First Lawsuit
This isn’t Musk’s first lawsuit rodeo—Tesla was sued for similar claims in June.
Tesla was sued in the summer over a similar issue when Musk decided to lay off 10% of the company’s workforce without giving a large enough notice.
Musk went on to describe the lawsuit as “trivial.”