According to media reports on Saturday, Twitter’s new owner Elon Musk sacked key executives to avoid paying out significant severance packages and planned additional layoffs as soon as Saturday to dodge stock grants that were due on November 1.
After buying the firm, Elon Musk sacked key Twitter executives to avoid paying out substantial severance packages, according to sources. Musk fired Twitter’s CEO Parag Agrawal, CFO Ned Segal, and head of law and policy Vijaya Gadde, who were each due a $122 million separation payment. These executives’ “for cause” terminations could prohibit the vesting of their unvested stock grants.
Following the completion of a highly publicized $44 billion buyout of the social media platform on Thursday, people familiar with the situation told Reuters that Musk fired Twitter Chief Executive Parag Agrawal, Chief Financial Officer Ned Segal, and Chief Legal Affairs and Policy Officer Vijaya Gadde.
He had claimed that they had misled him and Twitter’s investors over the prevalence of fraudulent accounts on the site. The executives stood to get parting compensation totaling around $122 million, according to research firm Equilar.
The Information alleged that Elon Musk fired four top Twitter executives, including Agrawal and Segal, “for a reason,” citing unnamed persons with knowledge of the situation, apparently to dodge severance compensation and unvested stock awards.
LightShed analyst Rich Greenfield said in a tweet on Saturday that Musk removed top Twitter executives “for cause,” delaying the vesting of their unvested stock as part of a shift of ownership.
Twitter did not immediately answer the request for comment from Reuters. The sacked executives were not directly reachable by Reuters.
According to Courtney Yu, director of research at Equilar, the fired Twitter executives “should be receiving these (severance) payments unless Elon Musk had cause for termination, with a cause in these cases typically being that they broke the law or violated company policy,” according to a statement to Reuters on Friday.
In the meantime, The New York Times reported on Saturday that Musk had ordered layoffs before November 1, when workers were supposed to get stock awards as part of their remuneration. Musk also called for employment cuts across the company, with some teams being reduced more than others. Â
According to the Times, who cited unnamed persons who know the situation, the cuts may start as soon as this Saturday.
