Mariella Moon
·Contributing Reporter
Fri, November 4, 2022
Anadolu Agency via Getty Images
Twitter is facing a class action lawsuit over its ongoing mass layoffs, which could potentially cut its workforce in half. According to Bloomberg, employees filed a class action lawsuit against the company in San Francisco federal court, arguing that Twitter's actions run afoul of the US Worker Adjustment and Retraining Notification (WARN) Act. Under the labor law, companies with 100 or more employees are required to notify them of mass layoffs 60 days in advance.
The New York Times reported earlier that Twitter would begin layoffs and that around half of the company's staff members would be affected. In an email seen by The Washington Post, Twitter said that the layoffs are "unfortunately necessary to ensure the company's success moving forward." The company also told employees to stay at home today and to wait for an email. If they get one in their Twitter-owned email inbox, their job is safe. But if they receive the email in their personal account, that means they're being let go. Some people are reporting on the social network that they have already been locked out of their work emails and had been removed from the company's central Slack account.
The plaintiffs are asking the court to issue an order forcing Twitter to obey the WARN Act. They also want the court to prohibit the company from soliciting employees to sign away their right to litigate. Shannon Liss-Riordan, the lawyer representing the plaintiffs, said they filed the complaint "in an attempt to make sure that employees are aware that they should not sign away their rights and that they have an avenue for pursuing their rights."
Liss-Riordan was also the lawyer who handled the lawsuit against Tesla in June over layoffs that cut 10 percent of the automaker's workforce. Similar to this complaint, the plaintiffs back then argued that Tesla violated the WARN Act. Company chief Elon Musk, who took over Twitter a week ago, called the lawsuit "trivial" in a talk with Bloomberg Editor-In-Chief John Micklethwait. The court had also sided with the company and ruled that employees should negotiate with Tesla in a closed-door arbitration instead.
Brie Stimson
Fri, November 4, 2022
A class-action lawsuit was reportedly filed against Twitter on Thursday on behalf of workers claiming the company’s intended layoffs violate a federal law requiring 60 days notice for employees.
A week after Elon Musk finalized his $44 billion purchase of the Silicon Valley-based social media platform, a letter went out to employees saying about half of the company’s 7,500-person workforce will be losing their jobs starting Friday.
"Team, in an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global workforce on Friday," Thursday's email to employees read, according to the Washington Post. "We recognize that this will impact a number of individuals who have made valuable contributions to Twitter, but this action is unfortunately necessary to ensure the company’s success moving forward."
Several top executives have already left the company amid the impending layoffs, including former CEO Parag Agrawal, Chief Financial Officer Ned Segal, and policy chief Vijaya Gadde.
ELON MUSK SCRAPPING TWITTER'S ‘DAYS OF REST’ FROM EMPLOYEE CALENDARS: REPORT
The Worker Adjustment and Retraining Notification Act requires large companies to notify workers two months in advance of planned job cuts, according to Bloomberg.
"We filed this lawsuit tonight in an attempt to make sure that employees are aware that they should not sign away their rights and that they have an avenue for pursuing their rights," attorney Shannon Liss-Riordan, who filed the San Francisco lawsuit said, the outlet reported.
Low-angle view of sign with logo on the facade of the headquarters of social network Twitter in the South of Market neighborhood of San Francisco Oct. 13, 2017.
ELON MUSK PLANNING TO CUT HALF OF TWITTER'S WORKFORCE: REPORT
She continued, "We will now see if he is going to continue to thumb his nose at the laws of this country that protect employees. It appears that he’s repeating the same playbook of what he did at Tesla."
In this photo illustration the logo of Twitter can be seen on a smartphone on March 10, 2022 in Berlin.
Liss-Riordan filed a lawsuit in Texas against Musk’s electric car company in June after it laid off 10% of its employees.
A Texas judge ruled in favor of Tesla, ordering employees to go through arbitration.
According to Twitter's merger agreement with Musk, laid off employees must receive severance and benefits on par with what they would have received before his takeover, the Los Angeles Times reported.
Twitter did not immediately respond to Fox Business' overnight request for comment.
Fox News' Paul Best contributed to this report.
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.
Jaimie Ding
Thu, November 3, 2022
Elon Musk reportedly plans to lay off about half of Twitter's workforce as part of sweeping changes since he took control of the social media company. (Jeff Chiu / Associated Press)
In recent years, big technology companies have dangled ever more generous benefits to entice engineers in a seller's talent market. 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.
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.
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.
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. Friday. All offices will be temporarily closed and badge access suspended, and any employees at an office were asked to return home, the email said.
After 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.
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.
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.
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.
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.
In his pursuit of Twitter, Musk ignored SEC disclosure requirements and tried to back out of a signed merger agreement.
Employees 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.
Ramish Saqib, who worked as a software engineer at Twitter for a year, said he was given one week's notice and 60 days of severance pay when he was laid off in July. Speaking on background, another former employee said the standard severance for large layoffs was 60 days with additional pay based on years of tenure.
If Musk doesn’t offer similar severance packages to employees laid off in the next year, they would have grounds to sue the company as intended third-party beneficiaries to the agreement, said Lloyd Greif, chief executive of Greif & Co., an investment bank that handles mergers and acquisitions.
“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. “They could bring an action against the company he now owns … to enforce that promise.”
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.
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. An employer that violates the notice requirement may be liable for back pay for the number of days less than the 60-day requirement. Companies often offer 60 days of severance pay in lieu of notice.
California’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.
According 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. 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.
Musk already terminated several top Twitter executives last week, including its CEO and chief financial officer. 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.
In fact, the WARN Act does not distinguish between employees fired and those let go for cause, said Laura Reathaford, a California employment lawyer with Lathrop GPM. Companies are typically cautious about firing employees for cause during periods of large-scale workforce reductions and tend to handle such terminations as layoffs to avoid opening themselves up to legal scrutiny.
At the same time, WARN regulations are often “cumbersome and confusing” to enforce, making litigation over the act uncommon, Reathaford said.
Tesla, the electric-car maker that is the source of most of Musk's vast fortune, was sued in June by former employees who said the company violated the WARN Act by failing to provide 60 days’ notice when it laid off more than 500 employees at a plant in Nevada.
Several software engineers who were laid off during that time in a 10% reduction of the workforce received only one week’s severance and were told they were fired in secret meetings with their managers, according to reporting by Gergely Orosz in the Pragmatic Engineer.
Orosz said Tesla was trying to bypass the WARN Act by disguising the layoffs as performance-related terminations. Twitter did not immediately respond to a request for comment. Tesla does not maintain a media relations department or respond to media inquiries.
This story originally appeared in Los Angeles Times.
Elon Musk takes away 'days of rest'
at Twitter in another major shift from
Jack Dorsey's leadership style
Elon Musk has started to impose his more demanding style on Twitter workers.
Under Twitter founder Jack Dorsey's leadership, the company implemented "Days of rest" in 2020.
Already, Musk has been demanding a "24/7" work culture as he moves to remake Twitter.
Twitter employees are losing additional days off in yet another change to their work culture under Elon Musk's leadership, according to people familiar with the matter.
On Thursday, employees began to notice that regular companywide days off — called "days of rest" — had been removed from their calendars, two people with knowledge of the company told Insider.
Meanwhile, the people said there has been "absolutely zero" communication from the company's top leadership since Musk's takeover — about days off or anything else. Employees had to ask their managers directly about the changes to their calendar, the people said. Eventually, individual managers confirmed that the "days of rest" were no more, they said.
A representative of the company did not respond to a request for comment. Bloomberg previously reported the days were being taken away.
During the first peak of the pandemic in 2020, Twitter implemented "Days of rest" under Jack Dorsey, the previous CEO and a cofounder of the company. He encouraged employees to avoid burnout and to set days every week where they had no meetings.
As part of that effort, the company also instituted one "day of rest" each month where the entire company took the day off. These were on top of any holidays or individual vacation days.
Musk's style of leadership is not one that looks to avoid burnout. At Tesla and SpaceX, workers are known to work grueling hours as the billionaire strives to hit lofty goals. The CEO has said in the past he has slept on Tesla's factory floor and worked 120 hour weeks to meet his targets.
Already at Twitter, some employees are working late and on weekends — and a few have even spent the night in the office to keep up with Musk's demands.
He's ordered people working on "Elon-critical projects," like getting a new subscription model for verification, to work "literally 24/7" and in 12-hour shifts around the globe to get the work done on an incredibly tight timeline, according to an internal memo seen by Insider. Overall, people are expected to work at a "maniacal" pace and pitch Musk directly with new "cool" ideas, if they would like to keep their jobs.
In another step away from Dorsey's leadership style, the billionaire also plans to end Twitter's remote-work policy, according to a report from Bloomberg on Wednesday. Musk made a similar move in June at Tesla when he ordered workers to return to the office full-time or quit. Twitter was one of the first major tech companies to declare a work-from-home "forever" policy in 2020.
Even with a new amount of effort and forced productivity, thousands of Twitter employees are expected to lose their jobs, along with those in the C-suite and many high-ranking managers that already have. As Insider reported, more than 3,700 people have been selected at the company for layoffs, widely expected to take place on Friday.
A Twitter employee shared a photo appearing to show his boss asleep on the office floor.
His boss said in response that her team was "pushing round the clock to make deadlines."
Insider previously reported that some staff have been asked to work 24/7 since Elon Musk's takeover.
A Twitter employee shared a photo appearing to show his boss asleep on the office floor just days after Tesla CEO Elon Musk took over the company.
The photo shows Esther Crawford, director of product management at the social media giant, wearing an eye mask and wrapped up in a sleeping bag on top of a sleeping mat.
"When you need something from your boss at elon twitter," Evan Jones, a product manager at Twitter Spaces, tweeted at around 2:00 a.m. New York time Wednesday.
Crawford replied, tweeting: "When your team is pushing round the clock to make deadlines sometimes you #SleepWhereYouWork."
It is unclear where the photo was taken. Jones' Twitter page says he is based in New York, while Crawford's says she is based in Los Angeles. Twitter has offices in all four US timezones.
Insider reached out to both Jones and Crawford early Wednesday morning, but they did not immediately respond.
Crawford tweeted Tuesday that she was "very proud" of efforts at Twitter "to quickly shift gears and bring this new vision to life."
Staff at Twitter have been clocking up much longer hours than usual since Musk took over, with his team assigning them big tasks on tight deadlines. Some staff at the company see the assignments as a test by Musk's team to see who works hard and worry their jobs could be on the line amid the looming threat of layoffs.
An internal message told Twitter staff working on changes to the company's verification process that "the expectation is literally to work 24/7 to get this out," Insider previously reported.
CNBC reported that Twitter managers have told some staff to work 12-hour shifts, seven days a week, while The New York Times reported that some managers slept at the office on Friday and Saturday nights.
Musk's $44-billion purchase of Twitter went through last Thursday night. The tech mogul had first offered to buy the platform in April after becoming the company's biggest shareholder, though he tried to back out of the deal a few months later, citing concerns about the number of bots on the platform.
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