Amid plunged into turmoil, the much-anticipated layoffs at Twitter Inc (NASDAQ:TWTR) CEO Elon Musk now seem to be defending his decision to sack almost 50% company's workforce across the globe.
On Friday, Twitter reportedly laid off thousands of employees in departments across the company, including more than 983 employees in California, according to CNBC. The ongoing layoffs are expected to ultimately affect about 3,700 people. Twitter employees from departments including marketing and communication, AI, search, public policy, wellness, and other teams tweeted about having been let go.
Musk, also Tesla Inc's (NASDAQ:TSLA) CEO, has reportedly been sued over his plans to eliminate its workforce. The class action lawsuit was filed in San Francisco, California, in a federal court by attorney Shannon Liss-Riordan.
Several Twitter employees have filed class action lawsuits alleging that Twitter violates the federal and California Worker Adjustment and Retraining Notification Act (WARN Act) after laying off employees, CNN reported.
Meanwhile, Musk went on Twitter on Saturday to justify his move and said there was no choice when the company was losing millions of dollars daily. He also said that everyone who exited was offered appropriate severance.
Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day.
— Elon Musk (@elonmusk) November 4, 2022
Everyone exited was offered 3 months of severance, which is 50% more than legally required.
Also Read: Here's Why Kevin O'Leary Is Betting On Elon Musk Coming Out On Top In Twitter Deal
Last week Musk tweeted, "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".
Musk is aiming to reduce the company's costs, not only because Twitter is facing a high burn rate, but also because he needs to repay the $13 billion in debt he raised to swing the takeover.
He has also announced that the company will charge $8 per month from verified accounts. He tweeted about the new pay structure on Saturday.
Trash me all day, but it’ll cost $8
— Elon Musk (@elonmusk) November 5, 2022
Twitter posted a net loss of $270 million in the second quarter that ended June 30, 2022, compared to a profit of $66 million in the same period last year.
Musk purchased Twitter for $44 billion and is under pressure to cut costs after making a deal in which he overpaid, according to some analysts.
