Twitter and new CEO Elon Musk laid off an undisclosed number — but as many as roughly half — of the company’s 7,500 employees on Friday, which has already landed the embattled executive in legal hot water.
Musk informed Twitter employees in an email Thursday night that they would be notified by 9 am PT (noon ET) on Friday whether they still had a job at the company, prompting an immediate lawsuit filed in San Francisco federal court. The suit alleged that Musk was in violation of the federal Worker Adjustment and Retraining Notification Act, which restricts large companies from conducting mass layoffs without at least 60 days notice.
The new CEO may well have taken notice, as some employees have been informed they will continue to be paid until January 4, according to media reports.
Attorney Shannon Liss-Riordan, who filed the suit, said she’s pleased Musk “is making an effort to comply” with the law. Employees have been told they will receive a severance agreement next week in which Twitter will ask them to waive any potential claims against it, she noted, per Bloomberg. Liss-Riordan notably brought a similar lawsuit against Musk-run Tesla, and a judge ruled that employees would have to handle their mass layoff claims in arbitration.
The layoffs reportedly included nearly if not all of Twitter’s curation team, which was responsible in part for making sure users would receive only vetted information from the site’s moments, trends and topics offerings during “civic integrity” events such as elections, breaking news and sports. That’s according to reporting from the guardian, who spoke with anonymous internal sources.
“The platform is likely to become more toxic with less healthy information to counter the disinformation or misinformation narratives,” an employee said.
Twitter's PR and communications team has also taken significant cuts, according to Bloomberg reporter Kurt Wagner.
It sounds like Twitter’s PR/comms team — which was maybe ~80-100 people — is down to just two people after layoffs today….
— Kurt Wagner (@KurtWagner8) November 4, 2022
Musk previously fired CEO Parag Agrawal and other top executives, and that trend has continued outside the US. Among those laid off were Paul Burns, managing director of Canadian operations, and Michele Austin, director of public policy for the US and Canada, both of whom tweeted that they were leaving the company Friday.
The layoffs are part of Musk's attempt to "place Twitter on a healthy path" by cutting costs and dealing with a "massive drop in revenue," according to his email to staff. That’s already getting harder, as advertisers including Audi, General Motors, General Mills (NYSE:GIS) and Pfizer have paused ad spending on the platform, according to media reports.
Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists.
Extremely messed up! They’re trying to destroy free speech in America.
— Elon Musk (@elonmusk) November 4, 2022
Other tech companies make similar moves
Layoffs are a reality for more than just Twitter. Ride-hailing company Lyft laid off 700 employees, about 13% of its workforce, on Thursday, according to reports.
“There are several challenges playing out across the economy,” Lyft co-founders John Zimmer and Logan Green wrote in a memo to staff obtained by The Wall Street Journal. “ We’re facing a probable recession sometime in the next year and ride-share insurance costs are going up.”
Meanwhile, Stripe, a personal payment app, laid off 14% of its workforce on Thursday, and GoFundMe cut 94 employees, 12%, last week.
Updated to include information on which employees have been laid off from Twitter and comments from attorney Shannon Liss-Riordan. This story was updated throughout the day.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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