Ever since the tech mogul Elon Musk took the reins of Twitter, rebranding it as X Corp., the social media giant has been navigating through a labyrinth of legal challenges. From mass layoffs to pending arbitration cases, the company has been under constant scrutiny, both from the public and the legal system.
According to recent reports, X Corp. is currently entangled in a staggering 2,200 arbitration cases. The primary bone of contention? Severance packages for former employees. These employees allege that the company has not only failed to deliver on promised severance packages but has also deliberately delayed arbitration proceedings by not paying the required fees for the dispute resolution system, JAMS.
The financial repercussions of these arbitration cases are far from trivial. The fees for JAMS alone amount to approximately $3.5 million. This figure doesn’t even account for the actual severance packages, which are expected to be significantly higher.
While the financial aspect is alarming, the human cost is equally concerning. Since Musk’s takeover last October, the employee count has plummeted from over 7,000 to under 2,000. This mass exodus has led to operational chaos, rendering some teams virtually non-functional and causing technical glitches across the platform.
The legal woes don’t end there. Class-action lawsuits are brewing in both Delaware and California. In California alone, there are 891 cases where former X Corp. employees claim they had to agree to arbitration to even receive a severance package. Musk had initially promised these employees three months’ salary as severance.
Musk’s tenure at the helm of X Corp. has been anything but smooth sailing. From unauthorized logo changes to disputes over rent payments, the company has been a magnet for controversies. Most recently, X Corp. filed a lawsuit against the anti-discrimination organization CCDH, accusing them of unauthorized data access and potential harm to the company’s reputation.