Elon Musk’s X has reportedly made a significant mistake, and some of the employees that the company recently laid off are being asked to pay up as a result.
After the social media platform cut the last of its staff in Australia last year, X is reportedly claiming that it accidentally overpaid a group of those laid off employees in severance and is threatening to take them to court if they refuse to repay the money, according to a new report from The Sydney Morning Herald.
Related: Elon Musk wants Tesla staff to be ‘absolutely hard core’ about layoffs
“It has come to our attention that you received a significant overpayment in error in January 2023,” read an email sent to the employees, which The Sydney Morning Herald saw. “We would be grateful if you could arrange the repayment to us [using the account details below] at your earliest convenience.”
X allegedly claims that the error stemmed from “deferred cash compensation” in the form of company shares granted to employees when they first joined the company. The shares were valued at $54.20 per share (about $82 in AUD) when Musk acquired Twitter (now X) in 2022. X claims that it made “currency conversion errors” when employees were paid severance, leading to overpayments of $1,500 and $70,000.
One employee was allegedly even paid severance at a conversion rate that was “2.5 times the value of the shares,” according to The Sydney Morning Herald.
The report notes that X is threatening to recover the overpaid funds from former employees “together with interest” if they don’t comply. So far, allegedly none of the ex-employees have repaid the funds.
Elon Musk's previous controversy over severance
This is not the first time a company owned by Musk has run into conflict with paying severance to laid off employees. Most recently, after Tesla (which Musk is also CEO of) laid off roughly 10% of its workforce in April, Musk emailed his staff apologizing for the quality of the severance packages that were sent out to the axed employees.
More on Elon Musk:
- Investors have finally had enough of Tesla CEO Elon Musk
- Jim Cramer says Elon Musk has a ‘mental condition’
- Elon Musk wants Tesla staff to be ‘absolutely hard core’ about layoffs
“As we reorganize Tesla it has come to my attention that some severance packages are incorrectly low,” Musk wrote in the email, which was seen by CNBC. “My apologies for this mistake. It is being corrected immediately.”
Musk is also currently facing a lawsuit, which was filed in March, from former Twitter executives who allege that he declined to pay them around $200 million in severance after “firing them without reason” in 2022.
Related: Veteran fund manager picks favorite stocks for 2024
