X is finally moving to settle the massive severance lawsuit that has haunted Elon Musk since his chaotic 2022 Twitter acquisition. More than two years after laying off over 6,000 employees, the social media platform is tentatively agreeing to a deal that could resolve claims worth up to $500 million, according to court filings obtained by Reuters.
X is moving toward what could be the largest employment settlement in tech history, potentially paying hundreds of millions to thousands of former Twitter employees who were cut loose during Elon Musk's brutal 2022 restructuring. The tentative settlement emerged late today through court documents where both sides asked for a delay in upcoming appeals hearings to hammer out final terms.
The development marks a stunning reversal for Musk, who had been winning the legal battle until now. Just last month, he seemed poised to escape the massive payout entirely after a U.S. District Judge in San Francisco ruled that X wasn't bound by Twitter's pre-acquisition severance agreements. But the former employees appealed, setting up what would have been a high-stakes hearing next month that could have reinstated the full claims.
The numbers tell the story of Silicon Valley's messiest mass layoff. When Musk acquired Twitter for $44 billion in October 2022, he immediately began slashing the workforce, ultimately cutting more than 6,000 positions and reducing headcount by roughly 80%. According to the class action lawsuit, many of those employees never received their full severance payments, while others got nothing at all despite assurances they would be taken care of.
At the heart of the dispute was a gap between promises and reality. Musk offered three months of severance to departing employees, but the lawsuit argued that Twitter's existing 2019 severance plan guaranteed much more generous packages. Senior employees were entitled to up to six months of base pay plus an additional week for every year of service under the original agreement, according to .
