The repercussions of Elon Musk’s alleged failure to fulfill severance payments to employees following his acquisition of Twitter are becoming increasingly apparent. Several lawsuits have been filed against Musk, one of the world’s wealthiest individuals, accusing him of not meeting the obligations owed to approximately 6,000 employees who were terminated after the Twitter acquisition.
According to a CNBC report on Monday, the technology company now known as “X” is facing approximately 2,200 arbitration cases filed by former employees. These cases come with mandatory fees totaling $3.5 million, and this sum does not even cover the actual severance payments owed to the terminated workers.
In October, shortly after taking control of Twitter, Musk conducted a massive layoff affecting over half of the company’s workforce. He had pledged to provide most employees with at least two months’ salary, along with a week’s pay for each year of service at the company.
However, thousands of individuals claim they have not received any compensation, leading former employees to initiate numerous legal actions in pursuit of the promised benefits.
One of these lawsuits, initiated earlier this year, invokes an arbitration provision outlined in employees’ contracts. According to reports, this provision places Musk’s company responsible for covering $1,600 in arbitration expenses per two-party case, with former employees required to contribute only $400. With over 2,000 cases filed, the total arbitration cost for the social media network alone amounts to nearly $4 million.
Reportedly, “X” has contested the obligation to cover these expenses, arguing that it did not compel former employees to shift their disputes to arbitration. As a result, former staff members have initiated another legal action, seeking to have the company cover the fees associated with their initial filings.