Tech billionaire Elon Musk is set to pay $500 million to 6,000 workers fired without severance after his Twitter takeover.
Musk and his social media company X Corp. reached a tentative settlement in a lawsuit filed by former Twitter employees. The deal was reported in a Wednesday court filing obtained by The Independent.
“The parties have reached a settlement agreement in principle and began negotiating the terms of a long form settlement agreement on August 19, 2025,” court documents read.
Musk acquired Twitter in 2022 and subsequently fired about 6,000 employees, more than half its workforce, and re-branded the blue bird platform as X.
The proposed class action lawsuit was filed in California by Courtney McMillian, who had overseen Twitter’s employee benefits programs, and Ronald Cooper, who was an operations manager.
Their suit claimed that in a 2019 severance plan, most Twitter employees would receive two months of their base pay and one week of pay for each full year they were at the job, Reuters reported.
But Twitter only offered at most one month of severance pay and many laid-off workers didn’t receive any additional compensation, the suit claims.
McMillian and other senior employees were guaranteed six months of base pay, per the suit.
The settlement was reached about a month before the suit was set to go before a federal appellate court. A California federal judge previously granted a motion to dismiss the lawsuit, according to Bloomberg Law.
Since the deal has been agreed to in principle, both sides have asked the appellate court to delay an upcoming hearing.
“If the district court approves the proposed distribution, the agreement will resolve the litigation in its entirety and moot this appeal,” the filing read.
Musk spent $44 billion to acquire Twitter in a drama-filled deal.
Musk agreed in April 2022 to buy Twitter, but months later, he said he was going to back out of the acquisition. Twitter went as far as to sue the tech mogul to force him to complete the deal.
Musk ended up closing the deal in October 2022 and soon after began his firings by axing then-CEO Parag Agrawal and other top Twitter executives, according to multiple reports.
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