After Elon Musk took over Twitter, one thing was certain, there were going to be big changes. Indeed, he has so far not disappointed. The company has been cutting its operation cost by sacking its staff. At the moment, Twitter has less than 70% of the staff it had before Musk took over. However, Elon Musk is not done just yet, he will still fire some more staff. Recent info reveals that Twitter laid off at least 50 more staff on Saturday. This makes it at least the eighth round of layoffs since Musk took over the social networking platform at the end of October. The job cuts are aimed at cutting costs and offsetting a plunge in revenue since Musk took over.
Twitter’s latest layoffs affect multiple engineering teams, including those that support ad tech. The company’s main Twitter app is now having a shortage of staff. The main Twitter app and the technical infrastructure that keeps Twitter’s systems running need attention. Since Musk took over Twitter, the company has laid off at least 70% of its staff. At the moment, there are only about 2000 staff left at the company. Since Musk got Twitter in October, the company’s income has drastically decreased. In an effort to increase income, Twitter revamped its sales team earlier this year.
Twitter’s layoffs are on the verge of bankruptcy
Twitter boss Elon Musk has repeatedly claimed that Twitter is on the verge of financial collapse. However, the cost of the company’s legal battle with more than 1,000 laid-off staff may be enough to bring it to its knees. Labour attorney Shannon Liss-Riordan revealed she has filed 1,300 individual arbitration cases on behalf of Twitter staff who were fired shortly after Musk took over last year. She also claims that much more such cases are in processing. The former Twitter staff, who was fired in November, said they were promised a much better severance package than the one Musk ultimately offered last month.
According to info from a couple of law firms, the entire arbitration process usually costs around $100,000. Businesses often require staff to agree to a private alternative to resolving disputes rather than more public litigation. Arbitration costs are often a burden on employers since staff often cannot afford the high cost of what the employer is essentially forcing them to do.
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Twitter is facing several lawsuits
According to this calculation, Musk may need to spend more than 130 million US dollars to deal with the arbitration cases submitted by former staff so far. The fee seems astronomical for Twitter, which Musk says is at risk of bankruptcy. To avoid bankruptcy, Musk has been cutting costs, slashing headcount to the lowest size in more than a decade. It is also abruptly shutting down a major data server, closing offices around the world and stopping rent payments.
“Twitter’s employment agreement states that these disputes will be arbitrated separately, so that’s what we’re doing,” Lairden said. Something that costs a lot less.”
Some former Twitter staff are working with other lawyers, including Lisa Bloom of The Bloom Firm and Akiva Bloom of the law firm Kamerman, Uncyk, Soniker & Klein. Akiva Cohen. Also, several class action lawsuits have been filed in U.S. federal courts by fired Twitter staff. The lawsuits make similar claims for severance payments for staff who filed for arbitration. These are in addition to some claims of protected classes.
Breach of severance pay promise
Overall, ex-Twitter staff said they were clearly and repeatedly promised by the company’s previous management that if they were fired after Musk took over, their severance packages included “equal to or greater than” two months’ basic Salary, stock vesting for three months, prorated bonuses, and cash to pay for ongoing health insurance. This promise is also included in the merger agreement signed by Musk and Twitter.
However, Musk only offered one month’s base salary as severance pay to the fired employees. He publicly claimed to offer workers three months’ pay as severance pay, but he appeared to conflate it with a period of “non-work” employment into which thousands of employees were included. Employees continue to receive their salaries during this period. National labour laws in the United States require companies to give certain notice periods when making mass layoffs.
To receive the one-month severance package, former Twitter employees must sign a severance agreement waiving their rights to litigation or arbitration, as well as any bonuses or stock dividends. The agreement also effectively prohibits them from talking about Musk, Twitter or their experiences at the company. Thousands of staff have chosen not to sign the agreement, and many have consulted lawyers on how to deal with severance packages.
Regardless, a new decision by the National Labor Relations Board (NLRB) has determined that nondisclosure and non-disparagement clauses often included in severance agreements, like those given to fired Twitter employees, violate state labour relations law. If the federal court upheld the NLRB’s decision, it would effectively invalidate all such provisions in the severance agreement. Even the relatively small number of Twitter staff who have signed the separation agreement provided by Musk will be free to talk about Twitter going forward.
At the moment, it is very evident that Twitter is facing some serious issues. Elon Musk has not lived up to expectations as a “genius” with Twitter. If this company must survive, it will be best to get a new CEO to run the affairs of Twitter. Of course, there should be very little or no interference from Musk.