Twitter begins widespread layoffs; class action suit filed
SAN FRANCISCO - Twitter began widespread layoffs Friday as new owner Elon Musk overhauls the social platform and some employees filed a class action lawsuit alleging not enough time was given to them before getting the boot.
The company had told employees by email that they would find out by 9 a.m. PDT if they had been laid off. The email did not say how many of the roughly 7,500 employees would lose their jobs.
Musk didn’t confirm or correct investor Ron Baron at a conference in New York on Friday when he asked the billionaire Tesla CEO how much money he would save after he "fired half of Twitter."
Musk, speaking at Baron’s annual investment conference, responded by talking about Twitter’s ongoing cost and revenue challenges and blamed activists who this week called on big companies to halt advertising on the platform. Musk hasn’t commented on the layoffs themselves.
"The activist groups have been successful in causing a massive drop in Twitter advertising revenue, and we’ve done our absolute best to appease them and nothing is working," Musk said.
Some employees of the San Francisco-based company tweeted earlier that they had already lost access to their work accounts. They and others tweeted messages of support using the hashtag #OneTeam. The email to staff said job reductions were "necessary to ensure the company’s success moving forward."
Twitter’s employees have been expecting layoffs since Musk took the helm of the company. Already, he has fired top executives, including CEO Parag Agrawal, on his first day as Twitter’s owner.
Musk also had removed the company’s board of directors and installed himself as the sole board member. On Thursday night, many Twitter employees took to the platform to express support for each other -- often simply tweeting blue heart emojis to signify Twitter’s blue bird logo -- and salute emojis in replies to each other.
As of Friday, Musk and Twitter had given no public notice of the coming layoffs, according to a spokesperson for California’s Employment Development Department. That’s even though the Worker Adjustment and Retraining Notification statute requires employers with at least 100 workers to disclose layoffs involving 500 or more employees, regardless of whether a company is publicly traded or privately held.
A class action lawsuit was filed Thursday in federal court in San Francisco on behalf of one employee who was laid off and three others who were locked out of their work accounts. It alleges that Twitter intends to lay off more employees and has violated the law by not providing the required notice of 60 days.
The layoffs come at a tough time for social media companies, as advertisers are scaling back and newcomers -- mainly TikTok -- are threatening the older platforms like Twitter and Facebook.
In a tweet Friday while employees were learning if they’d lost their jobs, Musk blamed activists for what he described as a "massive drop in revenue" since he took over Twitter late last week. He did not say how much revenue had dropped.
Big companies including General Motors, General Mills and Audi have all paused ads on Twitter due to questions about how it will operate under Musk. Volkswagen Group said Friday it is recommending its brands, which include Skoda, Seat, Cupra, Audi, Lamborghini, Bentley, Porsche and Ducati, pause paid activities until Twitter issues revised brand safety guidelines.
Musk has tried to appease advertisers, but they remain concerned about whether content moderation will remain as stringent and whether staying on Twitter might tarnish their brands.
In his tweet blaming activists for a drop in revenue, Musk said "nothing has changed with content moderation."
Insider Intelligence analyst Jasmine Enberg said there is "little Musk can say to appease advertisers when he’s keeping the company in a constant state of uncertainty and turmoil, and appears indifferent to Twitter employees and the law."
"Musk needs advertisers more than they need him," she said. "Pulling ads from Twitter is a quick and painless decision for most brands."
KTVU contributed to this report.