Elon Musk has had a turbulent few weeks. His first significant action since successfully completing his acquisition of Twitter last week has been to start letting go of sizable portions of the company's workforce. This has resulted in an immediate class action lawsuit against Twitter by five current or would-be former employees, filed on Thursday, November 3.
On Thursday, Twitter employees received an email stating that they will soon receive notices about their employment. As per the email, the notices would arrive in their company email accounts if they still have jobs. In case their "employment is impacted," the notice would be sent to their personal email accounts.
Twitter was sued on Thursday, immediately after the email, on the grounds that the social media platform violated the requirement for 60 days' notice of mass layoffs under both federal and state law.
As per internal plans examined by Reuters this week, Elon Musk intends to lay off 3,700 Twitter employees, or roughly half of the company's 7500-odd workforce, to cut costs and enforce a strict new work ethic.
The Tesla CEO addressed the article on Friday evening, tweeting that, "unfortunately there is no choice when the company is losing over $4M/day."
Elon Musk's popularity tanks with layoffs weeks before the holiday season
NBC News reported that, according to a Twitter employee, before Thursday's email, the team hadn't heard from Twitter since the company's acquisition on October 27, 2022. They shared that the notice resulted in "total chaos, house melting down" for everyone.
Five current or would-be former employees, four of whom are based out of San Francisco, home to Twitter's headquarters, immediately filed a lawsuit against the company for violating the federal WARN Act, under which employers have to provide a 60-day notice before any mass layoffs.
The suit also claims that three additional employees were blocked from accessing their Twitter accounts as of Thursday without receiving any official notice of a layoff, which they believe to be a sign that they will be fired.
The attorney who filed the complaint, Shannon Liss-Riordan, told Bloomberg that employees need to know their rights. She stated:
“We filed this lawsuit tonight in an attempt the make sure that employees are aware that they should not sign away their rights and that they have an avenue for pursuing their rights.”
Employees have also shown concern that if they publicly disagree with Elon Musk, they stand a chance of losing both their jobs and the exit package.
Elon Musk, notably the current richest man on earth has received a lot of flak for the layoffs three weeks before the holiday season. With Thanksgiving and Christmas coming up, this is an objectively terrible time to lose a source of steady income.
The move has resulted in massive backlash from netizens
Criticism has poured in as the idea of billionaires helping with job creation is relentlessly questioned.
The Tesla CEO's business model has also been put on the spot following the news of the layoff.
Jokes have abounded at Elon Musk's expense.
According to two internal sources and an internal Slack message examined by Reuters, Musk has instructed Twitter's teams to find up to $1 billion in annual infrastructure cost savings.
Elon Musk had previously fired Parag Agrawal as CEO, along with Twitter's CFO and head of legal, public policy, trust, and safety, as soon as he took over the company.