Billionaire Elon Musk and his social media company X have reached a tentative agreement with former employees who sued for $500 million (£373 million) in severance pay. They filed this in court, asking a San Francisco appeals court to delay an upcoming hearing to finalize the deal.
The lawsuit came after Musk’s takeover in 2022 led to massive layoffs, impacting about 6,000 employees—over half of the workforce. These former workers claimed they were denied benefits they were entitled to, arguing that the company offered only limited severance. While some received just one month, others got nothing.
Court documents indicate that the parties are negotiating the details of the agreement, which still needs court approval. Courtney McMillian, the lead plaintiff, stated that many were left without crucial support during a challenging time.
This situation highlights a broader trend in the tech industry. Following the hiring surge during the early COVID-19 pandemic, companies like Facebook, Google, and Microsoft have also laid off thousands as they readjust to shifting market demands. A 2023 report showed that tech layoffs have reached their highest level in over a decade, with around 90,000 jobs cut in the first quarter alone.
These layoffs often hit lower-level positions first, raising questions about corporate responsibility and employee welfare. Experts suggest that companies need to rethink their strategies during economic downturns to avoid jeopardizing employee trust and loyalty.
As this settlement unfolds, it could set a precedent for how severance packages are handled in the tech sector and beyond. The situation continues to evolve, attracting widespread attention from both the media and social platforms, where users are actively discussing the implications for workers’ rights.
For more detailed insights, you can visit the BBC’s coverage.
