Twitter began mass layoffs on Friday (November 4), firing half of the company’s 7,500 staff, with Elon Musk seeking to implement sweeping changes upon becoming the owner of the social media platform.
Employees were first informed about the job cuts via email from the company on Thursday, with many tweeting that they had been locked out of their company’s systems. After taking over the company in October, Musk had immediately fired Twitter’s top executives, including its CEO Parag Agrawal and chief legal officer Vijaya Gadde.
The widespread cuts to Twitter’s workforce have not only raised concerns about the company’s ability to battle misinformation before the looming US midterm elections but have also been met with a class action lawsuit, which alleges that the sudden layoffs were in violation of California and federal law.
Why were they fired?
The move comes a little over a week after Musk finalised his acquisition of Twitter for $44 billion. The ownership change, which occurred months after Twitter sued Musk for breaching a binding agreement to purchase the firm, has put the richest man in the world under financial pressure — leaving him with around $13 billion in debt for the acquisition. Also, for the past 10 years, Twitter (like other social media companies) has been losing money due to a decline in digital advertising, The New York Times reported.
Musk, the world’s richest person, tweeted on Friday that Twitter was forced to reduce their workforce because “the company is losing over $4M/day,” adding that everyone who was removed was offered three months of severance pay.
In a separate tweet, Musk, who has previously described himself as a “free speech absolutist,” said that Twitter was experiencing a “massive drop in revenue.” He blamed the financial losses on “activist groups” that have pressured advertisers to ensure content moderation on the platform and accused them of destroying free speech in the country.
Since the layoffs, a coalition of civil rights groups have heightened their demands on companies to put a hold on advertising buys on Twitter, in light of the coming midterm elections and for transgender users who have been facing hate speech online, the Associated Press reported.
What is the lawsuit about?
On November 3, several recently fired employees of Twitter filed a class action suit in a San Francisco federal court, for the company’s alleged violation of a nationwide and California labour law, by not providing employees advanced notice of their dismissal and severance pay.
One of the plaintiffs, Emmanuel Cornet, said he was fired from Twitter on November 1 without receiving any prior notice or any severance pay. Three other plaintiffs, Justine De Caires, Jessica Pan, and Grae Kindel, state that they were locked out of their Twitter accounts on November 3 without receiving requisite notice, which they understood to signal that they were being laid off.
The lawsuit seeks to ensure that Twitter complies with the federal Worker Adjustment and Retraining Notification (WARN) Act, as well as the California WARN Act by providing requisite notice and severance pay guaranteed by the laws. It also wants Twitter to “not solicit releases of claims of any employees without informing them of the pendency of this action and their right to pursue their claims under the federal or California WARN Act.”
What is the WARN Act?
The legislation requires businesses that have more than 100 employees to provide 60 days of advance notice before beginning a mass layoff. According to Reuters, a mass layoff by law is one that affects at least 500 employees during a 30-day period, or at least 50 employees if the layoff impacts at least a third of the company’s workforce. In lieu of giving notice, employers can give workers 60 days of severance pay.
This is not the first time that a company owned by Elon Musk has been accused of violating the WARN Act. The lawsuit states that another company he owns, Tesla, was also sued by several former employees this summer after he engaged in mass layoffs without providing advance written notice. When informing them of their layoff, Tesla attempted to get full releases of all WARN claims in exchange for severance pay of one-to-two weeks pay, which is significantly less than the 60 days required, it was claimed.
Fears of misinformation
Twitter has become a chief arena for government agencies to provide information to the public, and it has become one of America’s most influential platforms for spreading reliable voting information. Officials try to ensure that there is constant dialogue with voters via Twitter about potential risks, especially in the days leading up to elections, The Washington Post reported.
The mass job cuts across departments, including among those that do content moderation and monitor disinformation, have led to growing concerns that there will be an outflow of false information and conspiracy theories before the midterm elections of November 8, which will decide whether it is the Democrats or Republicans who will control Congress. Many Republican candidates, as well as voters in the country, continue to believe and disseminate the false claim that the 2020 Presidential election was stolen, and that Joe Biden defeated Donald Trump through fraudulent means.
Yoel Roth, Twitter’s Head of Safety and Integrity said on Friday that the company’s front-line moderation staff was least impacted by the layoffs.
Concerns about the spread of misinformation and hate speech under Musk’s leadership of Twitter have resulted in many company’s halting their advertisements on the platform, The New York Times reported. The Volkswagen Group has advised their automotive brands such as Audi, Porsche and Bentley to halt spending on Twitter, so that their ads don’t appear next to problematic content. The Danish brewing company Carlsberg Group has also reportedly recommended that their marketing team do the same.
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