Amid the start of mass layoffs at Twitter, company employees are launching a class action lawsuit against new CEO Elon Musk.
According to multiple sources, Musk began mass layoffs at Twitter on November 4, reducing the company’s workforce by 7,500 people. It is speculated that the CEO cut up to 50% of Twitter’s workforce, that is, about 3,500 people, just days after acquiring the company for USD 44,000 million on October 27.
In response to the layoffs, Twitter employees filed a class action lawsuit against Musk in federal court in San Francisco, Bloomberg reported. The lawsuit argues that Twitter is violating California and federal law by firing employees without notice.
The complaint specifically refers to the Federal Law on Notification of Adjustment and Requalification of Workers, which restricts large companies from mounting massive layoffs without at least 60 days notice. Well-known civil rights attorney Lisa Bloom argued that Musk has completely ignored the law, which applies to all California employers of more than 75 employees.
This WARN law applies to all California employers of 75+ employees, which obviously includes Twitter with its thousands of employees.
Purpose of the law is to give laid off employees time to figure out how to handle this disruption.
And Elon completely ignores it.
— Lisa Bloom (@LisaBloom) November 4, 2022
Shannon Liss-Riordan, the attorney who filed the class action lawsuit on Nov. 3, said all Twitter employees should know their rights. Employees “should not give up their rights and have a way to enforce them”, the lawyer pointed out.
Liss-Riordan is known to have also sued Musk’s electric car firm Tesla over similar allegations in June 2022, when Musk cut about 10% of his workforce. Tesla ended up winning the case in a closed trial rather than open, while Musk reportedly described Tesla’s lawsuit as “trivial.”
“It seems that he is repeating the same strategy of what he did in Tesla”, Liss-Riordan stated.
The layoffs are part of many changes taking place at Twitter amid the Musk acquisition, including verification of payment accounts. Twitter will reportedly start charging for user verification mark from November 7th.
Mass layoffs are not unique to Twitter, as many companies around the world have cut staff amid the current downturn in the tech industry. Tech giants like Meta, Amazon, Microsoft and Google have been freezing hiring or cutting jobs for months.
Many crypto companies have also been affected, adding to the impact of the current crypto bear market. According to data compiled by data provider CoinGecko, cities like San Francisco, Dubai, and New York bear the brunt of layoffs within the crypto space in 2022 to date.
The news comes after the New York Stock Exchange delisted Twitter on Oct. 28, when the social media giant went private. Other cryptocurrency trading platforms, such as eToro and Robinhood, have also pulled Twitter shares from their platform. According to estimates from the research firm Bot Sentinel, Twitter could have lost more than a million users, or 877,000 accounts, since the Musk acquisition.
The world’s largest cryptocurrency exchange, Binance, has invested $500 million to take a share of the Twitter purchase. Binance CEO Changpeng Zhao said the investment has high potential in terms of monetization, freedom of expression in the cryptocurrency community, as well as the opportunity to eventually “help bring Twitter to Web 3.0.”
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