Former HR boss at Twitter says the company failed to pay $500 million in severance pay owed to laid-off staff

• A former Twitter HR boss says it failed to pay $500 million in severance pay to laid-off staff.
• She said in a lawsuit that employees were given much less severance pay than promised.

A former HR boss at Twitter says that the company failed to pay $500 million in severance pay owed to laid-off staff.

Courtney McMillian filed a lawsuit against Twitter and owner Elon Musk in San Francisco on Wednesday, accusing the social media giant of not correctly compensating workers when it laid them off.

The lawsuit details how, since at least 2019, Twitter had calculated staff's severance based on a matrix that incorporated factors such as role, base pay, location, performance metrics, and reason for their termination.

Twitter stated in its merger agreement from April 2022 – when Musk first offered to buy the site – that for one year from the closing of the merger it would continue to provide staff with "severance payments and benefits ... no less favorable" than those available before the merger. Twitter's then-CEO Parag Agrawal and then-Chairman Bret Taylor confirmed this to employees, per the lawsuit.

After taking control of the company, Musk began laying off thousands of workers, which he said was necessary to cut costs and avoid bankruptcy.

Per the lawsuit, Twitter offered the terminated employees "at most" three months of compensation, comprised of two months of non-working employment to comply with the notice requirements of the WARN Act and one month of severance pay.

The lawsuit said that was just "a fraction" of what laid-off workers were entitled to under the severance plan. For example, senior employees were entitled to six months' base pay plus an extra week per full year of service, while non-senior employees were entitled to two months plus an extra week per year of service, according to a copy of the matrix attached to the lawsuit.

The lawsuit says that Musk and fellow members of Twitter's leadership didn't pay laid-off staff the amount they were owed under the matrix "because of the expense involved."

The lawsuit asks the court to order Twitter to pay back at least $500 million it says the company owes in severance pay. McMillian's lawyers did not immediately respond to Insider's request for comment on how it calculated this figure.

Twitter did not immediately respond to Insider's request for comment, made outside of regular working hours.

Since Musk took over, Twitter has been hit by a range of lawsuits ranging from vendors who said their invoices hadn't been paid to employees who said they weren't paid a proportion of their promised 2022 bonuses.

McMillian worked as Twitter's head of total rewards from August 2020 to summer 2022, before becoming its head of people experience, per her LinkedIn. She appears to have been laid off in November, though her separation date was in January.