By classifying them as for-cause firings, he is reportedly seeking to avoid paying compensations of $20 million to $60 million listed in the terms of the merger agreement. Musk already terminated several top Twitter executives last week, including its CEO and chief financial officer. Immediately upon taking over, Musk set aggressive deadlines for new feature launches managers reportedly urged their teams to work 12-hour days and sleep in the office or risk being targeted for dismissal. Companies often offer 60 days of severance pay in lieu of notice.Ĭalifornia’s WARN Act is even stricter, applying when there’s a layoff of 50 or more employees within a 30-day period, and the employer can be liable for civil penalties in addition to the back pay.Īccording to a number of sources close to Twitter, there has been widespread speculation among employees in recent days that Musk may try to use for-cause firings to deny severance to many terminated workers. An employer that violates the notice requirement may be liable for back pay for the number of days less than the 60-day requirement. Under the federal WARN Act, companies with more than 100 employees are required to give at least 60 days’ notice if they plan to lay off more than a third of the workers at one location or more than 500 employees, regardless of the percentage, within a 30-day period. Musk skimping on severance packages for laid-off employees would certainly invite class-action litigation against the company under elements of the California labor code meant to protect workers in these types of situations, Greif said. “They could bring an action against the company he now owns … to enforce that promise.” “It’s a promise from the company to the employees that when Elon Musk signed on the dotted line to buy Twitter, he became the company,” Greif said. In his pursuit of Twitter, Musk ignored SEC disclosure requirements and tried to back out of a signed merger agreement.Įmployees have some protection in the terms of that merger agreement, which states that Musk must provide severance payments and benefits to employees terminated within one year of the acquisition that are “no less favorable” than those applicable before Musk took over. Musk, however, has a long history of pushing the legal envelope in matters involving regulations around how Tesla advertises its autonomous driving capabilities, an agreement with the Securities and Exchange Commission to get his tweets approved in advance, a public health order to close a factory during COVID-19 lockdowns and numerous other examples. It’s unclear what benefits Twitter employees might receive, but in the event of a mass layoff, workers have some rights protected by both state and federal law, as well as the terms of the merger agreement between Musk and Twitter.īusiness Twitter employees brace for massive layoffs as Elon Musk completes his acquisitionĪs Elon Musk completes his acquisition of Twitter, workers debate whether to stay put and await termination or test the job market during a time of hiring freezes and layoffs across the tech industry. Stripe announced a generous severance payout of 14 weeks plus more for longer tenure, as well as six months of healthcare, 2022 bonuses and accelerated stock vesting for laid-off employees. The Twitter layoff news comes during widespread layoffs in the tech industry, with Lyft announcing layoffs of 13% of its staff and Stripe cutting 14% of its workforce. All offices will be temporarily closed and badge access suspended, and any employees at an office were asked to return home, the email said.Īfter the completion of Musk’s $44-billion takeover a week ago, there has been widespread concern among employees about what severance benefits they might receive and how Musk might seek to reduce the expected payout. In an email shared with the Los Angeles Times, the company said all employees would be notified of whether they still had their job via email by 9 a.m. Under new owner Elon Musk, the social media platform is preparing to terminate a large portion of its workforce - about half of its 7,500 workers, according to Bloomberg. Now that expectation is collapsing - and nowhere more rapidly than at Twitter, where thousands of employees are suddenly facing the prospect of joblessness in a newly chilly employment landscape. Layoffs, a rarity in Silicon Valley over the last decade, have typically come with the consolation of generous severance packages often including months of salary and healthcare coverage. In recent years, big technology companies have dangled ever more generous benefits to entice engineers in a seller’s talent market.
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