Twitter execs laid off to avoid payouts; new firings imminent
Another day, another twist in the ongoing Elon Musk-Twitter saga. The new boss of the microblogging platform has laid off top executives, and he reportedly did so to avoid severance payouts to the tune of $122 million. Twitter is also bracing for imminent mass layoffs to prevent stock grants to employees due on November 1. Twitter and Musk are yet to make a comment.
Why does this story matter?
This is a watershed moment for one of the world's biggest social media platforms. Not only is Musk planning to deny laid-off executives their golden parachutes, but the company's workforce is also facing the end of a smoking barrel. Around 50% of Twitter employees are expected to be fired. Whether content moderation rules will also be rolled back remains to be seen.
Musk wants to deny unvested stocks to laid-off execs
Musk fired top Twitter executives, including CEO Parag Agrawal; Legal, Public Policy & Trust, and Safety Lead Vijaya Gadde; CCO Sarah Personette; and CFO Ned Segal. He accused them of misleading investors over the number of fake accounts on Twitter. The Information reported that they were laid off "for cause." This was to ensure that they did not receive severance payouts and unvested stocks.
What is the legal angle?
The laid-off Twitter executives stand to gain compensations to the tune of $122 million, including unvested stocks. The Tesla chief wants to prevent these stocks from vesting as part of a change of control. However, to deny a payout, Musk has to prove the cause for their termination that there is a violation of company policy or that they broke the law.
Laid-off employees may lose out on stock grants
The 7,500-employee-strong company is also staring at imminent job cuts. Musk has reportedly ordered managers to create lists of workers to be laid off, and the firings will be done before November 1. On that date, employees are supposed to receive stock grants, which form a significant part of their pay. If laid off earlier, the SpaceX honcho can possibly deny them those payments.
