X Corp, formerly Twitter, and Elon Musk have reached a settlement in a lawsuit with four former top executives, including ex-CEO Parag Agrawal, who had sought $128 million in promised severance pay following their termination after Musk's acquisition. Although the settlement terms were not disclosed, this resolution follows a separate $500 million agreement with former rank-and-file employees over unpaid severance, highlighting the ongoing legal and financial repercussions for X Corp stemming from the 2022 acquisition and subsequent workforce restructuring.
Elon Musk and X Corp have reached a settlement in a lawsuit by four former top executives at Twitter, including former CEO Parag Agrawal, who claim they were not paid $128 million in promised severance pay after Musk acquired the social media company and fired them. The terms of the settlement, which was first announced in a filing in San Francisco federal court last week, were not disclosed. A federal judge on October 1 pushed back filing deadlines and a hearing in the case so the settlement can be finalized. X in August agreed to settle a separate lawsuit by rank-and-file Twitter employees who lost their jobs during mass layoffs and claimed they were owed $500 million in unpaid severance. The cases are among a series of legal challenges that Musk, the world's richest person, has faced after he acquired Twitter for $44 billion in 2022, cut more than half of its workforce and renamed it X. X and lawyers for the former Twitter executives did not immediately respond to requests for comment. The plaintiffs are Agrawal; Ned Segal, Twitter's former chief financial officer; Vijaya Gadde, its former chief legal officer; and Sean Edgett, its former general counsel. The former executives say that Musk falsely accused them of misconduct and forced them out of Twitter after they sued him for attempting to renege on his offer to purchase the company. Musk then denied the executives severance pay they had been promised for years before he acquired Twitter, according to the lawsuit. The plaintiffs say they each are owed one year's salary and hundreds of thousands of dollars' worth of stock options. Musk and X have denied wrongdoing and said the executives were fired over their performance. X Corp, formerly Twitter, has reached a settlement with four former top executives, including ex-CEO Parag Agrawal, regarding claims of $128 million in unpaid severance following Elon Musk's 2022 acquisition. While the settlement terms remain undisclosed, this resolution follows a prior $500 million agreement with former rank-and-file employees concerning their severance claims. These settlements represent significant financial outlays for X Corp stemming from its change of ownership and subsequent workforce restructuring. The legal developments underscore the persistent financial burden and operational complexities faced by X Corp post-acquisition, marked by extensive layoffs and leadership changes. Elon Musk has faced a series of legal challenges related to the $44 billion Twitter acquisition, including allegations of reneging on acquisition terms and denials of promised severance. The company's ongoing legal liabilities are a direct consequence of the aggressive restructuring and personnel decisions implemented after the takeover. Although X Corp is a private entity, these settlements reflect material liabilities that impact its valuation and cash flow. The repeated resolution of severance disputes, totaling potentially over $600 million, highlights a pattern of legal expenditures. These costs could constrain future investment or operational flexibility for the social media platform.
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