Ex-Twitter HR head says company failed to pay $500 million in severance pay to laid-off employees

By Ankita ChakravartiTwitter’s former HR head has claimed that the company has not paid $500 million in severance to the employees who were laid off. Courtney McMillian, who used to work for Twitter, filed a lawsuit against the company and its owner, Elon Musk, in San Francisco. She alleges that Twitter did not properly compensate workers when they were laid off. To recall, Musk reduced the work force by almost 80 per cent, resulting in the job loss of more than 7000 employees. He started off by firing the top executives, including the CEO Parag Agrawal, CFO Nel Segal and policy chief Vijaya Gadde.

According to the lawsuit, Twitter had a system in place since at least 2019 to calculate severance pay based on various factors such as job position, salary, location, performance, and reason for termination. In April 2022, when Musk expressed interest in buying Twitter, the company stated in a merger agreement that it would continue providing severance payments and benefits to employees for at least one year after the merger, on terms no less favorable than before.
However, after Musk took control of the company, he began laying off thousands of employees as a cost-cutting measure. The lawsuit claims that Twitter offered terminated employees only a maximum of three months’ compensation, which included two months of non-working employment to comply with legal notice requirements and one month of severance pay. This was significantly less than what employees were entitled to according to the severance plan, as outlined in a matrix attached to the lawsuit.

The lawsuit alleges that Musk and other Twitter executives failed to pay laid-off staff the full amount owed to them under the severance plan, citing cost as the reason. It seeks a court order for Twitter to pay back at least $500 million in unpaid severance. The lawsuit does not provide details on how this figure was calculated.

Neither Twitter nor McMillian’s lawyers immediately responded to requests for comment. It should be noted that since Musk took over, Twitter has faced multiple lawsuits, including claims from vendors about unpaid invoices and employees who did not receive their promised 2022 bonuses.McMillian worked at Twitter as the head of total rewards from August 2020 until summer 2022, after which she became the head of people experience. She appears to have been laid off in November, although her official separation date was in January.