Elon Musk and his company X have agreed to settle with former employees. The workers had taken legal action demanding $500 million in unpaid severance.
The agreement was revealed in a court filing on Wednesday. Both parties asked the San Francisco appeals court to delay a hearing. They said more time was needed to complete the settlement process.
Case sparked by mass layoffs
The lawsuit followed Musk’s 2022 decision to dismiss about 6,000 workers. That figure made up more than half of the company’s workforce. Many of those affected challenged the severance terms through court action.
So far, X and the lawyers representing the employees have not commented.
Court documents confirmed a settlement in principle. They also noted that both parties are negotiating the final agreement.
Conditions still confidential
The terms of the deal remain undisclosed. A court must approve the agreement before it becomes effective.
Former employee Courtney McMillian led the lawsuit. She claimed thousands of staff were denied the benefits promised under the severance plan.
The case argued that workers should have received up to six months of pay. Instead, most got at most one month. Some received nothing.
Musk’s job cuts reshaped company
The layoffs dismantled important units, including trust and safety, human rights, and media relations. Musk’s move marked one of the first major cost-cutting actions in the technology sector.
Other companies soon followed the trend. Google, Facebook, and Microsoft went on to lay off tens of thousands of workers. Those cuts came after years of heavy hiring during the pandemic’s digital expansion.
Musk applied same playbook in Washington
Earlier this year, Musk briefly led President Donald Trump’s Department of Government Efficiency. The office was created to reduce spending and cut jobs. Musk applied the same approach there, overseeing thousands of federal layoffs.
