Amid Twitter beginning mass layoffs, the company employees are launching a class-action lawsuit against the new Twitter CEO, Elon Musk.
According to multiple sources, Musk started massive layoffs at Twitter on Nov. 4, reducing the company’s workforce of 7,500 people. The CEO was speculated to cut as much as 50% of Twitter’s staff, or about 3,500 people, just a few days after acquiring Twitter for $44 billion on Oct. 27.
In response to the layoffs, Twitter employees filed a class-action lawsuit against Musk in San Francisco federal court, Bloomberg reported. The suit argues that Twitter is violating federal and California laws by laying off employees without enough notice.
The action specifically refers to the federal Worker Adjustment and Retraining Notification Act, which restricts large companies from mounting mass layoffs without at least 60 days of advance notice. Renowned civil rights attorney Lisa Bloom argued that Musk has completely ignored the law, which applies to all California employers of more than 75 employees.
Shannon Liss-Riordan, the attorney who filed the class-action lawsuit on Nov. 3, said that all Twitter employees should be aware of their rights. The employees “should not sign away their rights and that they have an avenue for pursuing their rights,” the attorney noted.
Liss-Riordan is known for also suing Musk’s electric car firm Tesla over similar claims in June 2022, when Musk cut about 10% of its workforce. Tesla eventually won the case in closed-door arbitration instead of in open court, while Musk reportedly described the Tesla lawsuit as “trivial.”
“It appears that he’s repeating the same playbook of what he did at Tesla,” Liss-Riordan stated.
The layoffs are part of many changes taking place at Twitter amid Musk’s takeover, including paid account verification. According to reports, Twitter will start charging for Twitter verification starting on Nov. 7.
Mass dismissals are not exclusive to Twitter as many companies around the world have been cutting workforce amid the ongoing technology industry’s slowdown. Tech giants including Meta, Amazon, Microsoft and Google have been either freezing hiring or cutting jobs for months.
Many crypto companies have also been affected, adding to the impact of the ongoing bear crypto market. According to data compiled by crypto data provider CoinGecko, cities like San Francisco, Dubai and New York are the hardest hit by crypto layoffs in 2022 to date.
The news comes after the New York Stock Exchange delisted Twitter on Oct. 28 amid the social media giant becoming a private company. Other crypto-friendly trading platforms like eToro and Robinhood also delisted Twitter shares from their platform. According to estimates from the research firm Bot Sentinel, Twitter may have lost more than a million users, or 877,000 accounts, since Musk’s takeover.
Major global cryptocurrency exchange Binance invested $500 million to take a share of equity at Twitter. Binance CEO Changpeng Zhao said that the investment has a high potential in terms of monetization, free speech in the crypto community as well as the opportunity to eventually “help bring Twitter into Web3.”