Key Points:
- The lawsuit comes as the new boss plans to eliminate half of the workforce.
- Tesla workers brought a similar suit earlier that case called trivial.
In response to Twitter’s mass layoffs, its employees are filing a class-action lawsuit against Elon Musk, the company’s new CEO.
Elon Musk, Twitter’s new CEO, is being sued as the company begins mass layoffs.
Twitter laid off 7,500 workers on Nov. 4, according to multiple sources. On Oct. 27, after acquiring Twitter for $44 billion, the CEO was rumored to cut as many as 3,500 employees.
A class-action lawsuit has been filed against Musk for the layoffs. A lawsuit alleges Twitter laid off employees without enough notice in violation of federal and California laws.
Large companies are prohibited from mounting mass layoffs without 60 days’ advance notice under the federal Worker Adjustment and Retraining Notification Act. In a lawsuit filed in California, renowned civil rights lawyer Lisa Bloom argued that Musk completely ignored California’s 75-employee law.
This WARN law applies to all California employers of 75+ employees, which obviously includes Twitter with its thousands of employees.
Purpose of the law is to give laid off employees time to figure out how to handle this disruption.
And Elon completely ignores it.
— Lisa Bloom (@LisaBloom) November 4, 2022
A class-action lawsuit was filed against Twitter by Shannon Liss-Riordan on Nov. 3. Liss-Riordan said all Twitter employees should know their legal rights. A lawyer told the employees they would have an avenue for pursuing their rights if they did not sign away their rights.
As Musk cut about 10% of Tesla’s workforce in June 2022 as part of his restructuring plan, Liss-Riordan sued Musk’s electric car firm, Tesla, over similar claims.
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Musk reportedly described the Tesla lawsuit as “trivial” after Tesla won in closed-door arbitration rather than open court.
“The playbook he used at Tesla seems to be the same here,” said Liss-Riordan.
As a result of Musk’s takeover, Twitter is making many changes, including paid account verification, which has resulted in layoffs. Twitter is expected to begin charging for Twitter verification on November 7.
Twitter is one of many companies laying off employees despite the ongoing slowdown in the technology industry. For months, tech giants such as Meta, Amazon, Microsoft, and Google have frozen hiring or reduced employment.
As a result of the ongoing bearish cryptocurrency market, many crypto companies have also been affected.
The hardest hit cities by cryptocurrency layoffs in 2022 are San Francisco, Dubai, and New York, as compiled by Crypto data provider CoinGecko.
In addition to becoming a private company, Twitter’s shares were delisted by the New York Stock Exchange on October 28. Several crypto-friendly trading platforms have also delisted Twitter shares, including eToro and Robinhood. According to research firm Bot Sentinel, approximately 877,000 Twitter accounts have been lost since Musk’s takeover.
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Twitter has invested $500 million in Binance, a global cryptocurrency exchange. The investment is likely to help Twitter become a Web3 company.
This will maximize monetization, free speech, and free thought in the crypto community, according to Binance CEO Changpeng Zhao.