After Elon Musk closed the $44 Billion Twitter deal, employees have been worried about job cuts. Some of the employees have told the news that they are worried about losing their equity compensation if Musk fires them before their shares are vested the first week of November. Elon Musk and Tesla have been sued multiple times over the employees’ claims that they were fired just before their shares were vested, depriving them of compensation.
According to the Twitter employees, they were reassured by the managers that the newly vesting shares are expected to be paid in the first half of November, starting as early as Nov. 4 and the company’s payroll department was working on processing their vested stock. Most tech companies are paying employees compensation through stock awards and Twitter has been reliant on equity payouts. The in early six months of 2022, Twitter rewarded its employees with a stock-based compensation expense of $459.5 million that’s almost 20% of Twitter’s revenue for the quarter.
Elon Musk has stressed this many times in recent months that Twitter is overstaffed and his starting move after acquiring the company is to make staff cuts. After the Twitter takeover, Elon has gotten rid of top executives, like the CEO, CFO, Policy Chief, and other high-ranking employees. Musk reportedly fired them to avoid paying millions of dollars in so-called golden parachutes.
The New York Times reported that layoffs at Twitter could take place before Nov. 1, a date when many employees were scheduled to receive stock grants. Musk responded, “this is false,” in a tweet on Friday, though he didn’t provide any evidence or further details. Twitter employees had some reason to be concerned about their equity, given the company is now in private hands, and because Musk has a history of apparently trying to avoid payouts.