Billionaire Elon Musk and his social media platform X have agreed to a settlement with former workers. The ex-employees had sued for $500 million in unpaid severance.
The agreement was revealed in a court filing on Wednesday. Both parties asked the San Francisco appeals court to delay a scheduled hearing. They want time to finalize the paperwork for the deal.
Thousands lost their jobs after Musk takeover
The dispute began after Musk cut around 6,000 employees in 2022. That was more than half of the platform’s workforce. Many of those workers filed lawsuits challenging the way the company handled severance.
Lawyers for the staff and representatives of X have not responded to requests for comment.
According to the court documents, both sides confirmed they had reached a settlement in principle. They added that talks had started on a detailed agreement.
Details of the deal remain secret
The exact terms of the settlement have not yet been disclosed. The courts still need to approve any final version.
Former employee Courtney McMillian led the lawsuit on behalf of the workers. She argued that the company denied nearly 6,000 people the benefits promised under its severance plan.
The claim stated that the firm should have offered up to six months of pay and other benefits. Instead, most dismissed staff received at most one month of severance. Some did not receive anything.
Musk reduced teams across the platform
The mass layoffs shrank vital departments such as trust and safety, human rights, and media relations. Musk’s actions marked one of the earliest large-scale workforce reductions in the tech industry’s cost-cutting drive.
Other companies soon followed. Facebook, Google, and Microsoft later cut tens of thousands of jobs. These reductions came after years of rapid hiring during the pandemic when digital demand soared.
Musk made similar moves in government role
Earlier this year, Musk served as head of President Donald Trump’s Department of Government Efficiency. The unit’s mission was to reduce government spending and shrink staff numbers. Musk applied similar measures there, overseeing the dismissal of thousands of federal employees.
