The platform would not have respected the rules on mass layoffs.
Elon Musk has taken over Twitter.
The billionaire begins to make his mark on the social network, considered the de facto Town square of our time.
One of its first major measures is the launch of an austerity cure materialized by massive layoffs. These drastic workforce reductions start this Friday, November 4, according to an internal memo seen by TheStreet.
“In an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global workforce on Friday,” the company said. “This action is unfortunately necessary to ensure the company’s success moving forward.”
In all, Musk plans to cut half of the jobs, or 3,700 jobs.
The decision is already the subject of controversy since a lawsuit has just been filed against Twitter. The plaintiffs, who have recently been terminated, accuse the company of failing to meet the legal notice period for mass layoffs.
The lawsuit was filed on November 3 by Emmanuel Cornet, Justine De Caires, Grae Kindel, Alexis Camacho, and Jessica Pan with the Northern District of California in San Francisco.
‘Locked Out’
“As an early example of the anticipated mass layoff, on November 1, 2022, plaintiff Cornet was notified that his employment was being terminated effective immediately,” the lawsuit said. “Twitter did not provide sixty (60) days advance written notice (or any advance notice at all) to plaintiff Cornet of his impending layoff. Nor did Twitter provide any severance pay to plaintiff Cornet.”
The complaint continued: “Although not formally notified of a layoff, or given any advance notice, Plaintiffs De Caires, Pan, and Kindel were locked out of their company accounts on November 3, 2022.”
Twitter was, and is, the complaint said, “subject to the notice and back pay requirements of the California WARN Act because Twitter is a business enterprise that employed 75 or more employees, as defined in the California WARN Act.”
The Federal Worker Adjustment and Restraining Notification Act limits large companies to carry out mass layoffs without giving notice to affected employees at least 60 days in advance.
In their ten-page complaint, the employees ask that this complaint be filed as a class action suit. They are also claiming material damages and reimbursement of their legal fees.
They also point out that Musk is customary to violate the Warn Act. Indeed, Shannon Liss-Riordan, their lawyer, had already launched a complaint against Tesla in June when the manufacturer of electric vehicles had cut 10% of its workforce. A federal judge had, however, asked the plaintiffs to reach an agreement with Tesla in arbitration and not in court.
You can read the lawsuit here.
Twitter didn’t immediately respond to a request for comment.
Top Executives Out
Musk is looking for ways to revive Twitter, which he acquired for $44 billion. If the social network is influential because it often determines the important issues, it generates on the other hand much less income than its rivals Youtube, Facebook, Instagram and TikTok which attract more advertisers.
The “Technoking” started by firing four top executives in the early hours of his takeover: CEO Parag Agrawal, chief financial officer Ned Segal, senior legal heads Vijaya Gadde and Sean Edgett.
There are the departures of other executives such as Chief Marketing Officer Leslie Berland, Chief Customer Officer Sarah Personette.
The billionaire also fired, unsurprisingly, the entire board of directors. He is currently the only board member but has indicated that it is only temporary.
The new boss also intends to remove other benefits, such as “days of rest”, one day per month granted to all employees when the covid-19 pandemic hit. He also wants employees back in the office.
Besides the cost cuts, Musk wants to make people pay for using Twitter.
The platform will soon start charging for blue badges showing that an account has been verified. Basically the person is who they say they are. This blue badge was previously free. This will now be part of a monthly subscription of $8 per month which gives subscribers other benefits.
