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Tesla CEO Elon Musk has reached a settlement in the $128 million lawsuit filed by former Twitter (now X) executives over unpaid severance compensation. According to newly released documents from the U.S. District Court for the Northern District of California, both parties have agreed to settle for an undisclosed amount, contingent upon Musk fulfilling certain conditions within a specified timeframe.
The lawsuit was originally filed in 2024 by former Twitter executives Parag Agrawal (CEO), Ned Segal (CFO), Vijaya Gadde (Chief Legal Officer), and Sean Edgett (General Counsel), who accused Musk of wrongful termination immediately after completing his $44 billion acquisition of the platform — allegedly to avoid paying severance packages and vested stock compensation. The incident was also documented in Walter Isaacson’s biography Elon Musk, which revealed the aggressive cost-cutting measures Musk undertook during the chaotic early days of the takeover.
Reports indicate that, in his effort to drastically reduce expenses, Musk not only carried out mass layoffs, but also suspended office rent payments and slashed server maintenance budgets. The settlement marks a significant turning point, signaling that both sides have reached an understanding and are close to ending a year-long legal battle.
If the agreement proceeds as planned, Musk may finally close the chapter on one of the most turbulent acquisitions in tech history. However, should he fail to comply with the settlement’s terms, court proceedings are set to resume on October 31.
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