Elon Musk’s X Reaches $128 Million Settlement with Former Twitter Executives

Recently, the settlement of a high-profile lawsuit concerning four former top managers of the social media company, once called Twitter, and currently, with the corporate name X Corp, has been closed. 

The executives involved, especially a former Chief Executive Officer, Parag Agrawal, claimed that they had a cumulative severance compensation of $128 million that was not paid after Elon Musk bought the platform in 2022. 

The adjudication of this claim is another milestone in the long line of legal battles that have followed the controversial takeover, which eventually resulted in the rebranding of the service to X.

Even though the direct terms of settlement are not publicized, the case highlights the growing legal and financial consequences of the managerial actions that Elon Musk made following the purchase of the platform in the amount of 44 billion. 

Furthermore, it raises the important question of how these cost-cutting measures and leadership style used by Musk have contributed to organizational performance and the well-being of the former employees.

Fallout and Twitter Takeover

In 2022, Elon Musk took over the social media platform at a valuation of $44 billion dollars following a lengthy and high-profile acquisition plan. After the acquisition, the new owner implemented the firing of some of its major executives, such as the former Chief Executive Officer Parag Agrawal, Chief Financial Officer Ned Segal, Chief Legal Officer Vijaya Gadde and General Counsel Sean Edgett.

Musk justified these terminations as a result of the supposed poor performance and misconduct. On the other hand, the former management argued that the layoffs had been planned as a means of avoiding the payment of severance, which was owed to the executives and included a one-year salary package and stock options with a valuation in the millions of dollars.

The lawsuit claimed that the severance structure was open and in place several years before the acquisition by Musk, and that the previous executives were unfairly fired in an attempt to cut expenditures and retaliate against resistance to the Musk decision to exit the contractual agreement regarding the platform.

Legal Battle and Settlement

The case, which was tried in a federal court in San Francisco, received a lot of academic and popular interest as one of the most examined corporate conflicts of recent times. 

At the beginning of October 2025, reports submitted to the court claimed that the two groups had agreed. The federal judge assigned to the case delayed the next hearings to help in finalizing the agreement.

Although no details of the settlement were disclosed, it may have been a financial deal between X Corp and the ex-executives, and neither the corporation nor the counsel of the plaintiffs made any publicly disclosed statements about the terms.

This settlement is based on a previous settlement that was secured in August 2025, where X Corp settled a different claim brought by former employees that was terminated due to widespread layoffs that were caused by Musk. Such employees claimed that they had an outstanding $500 million in severance compensation that was unpaid. 

The simultaneity of these cases suggests a tendency that Musk and his company are trying to finalize a part of the expansive series of legal dilemmas that have arisen after the storm of the tumultuous X-Twitter takeover.

Legal Problems Musk Has Faced Since the Twitter Takeover

Since the takeover, X Corp has been involved in several court battles that are related to employment issues, contractual dealings, and corporate policies. The first thing Musk did after taking office was to cut the number of employees by over 50% of the estimated 7,500 workers on the platform by claiming they were making financial losses and needed to reorganize the platform on a large scale.

Such actions, however, triggered serious legal consequences. It has been claimed that Musk breached the existing severance agreements and ignored relevant labor laws and the administrative side of layoffs by former employees. 

There have been many allegations that the allegedly affected persons were not given proper warning or compensation, although there were binding contractual agreements on the matter.

The case filed by the executives who have already left the company is of special interest because the position of the plaintiffs and their publicity were very high. The former CEO, Parag Agrawal, whose tenure with the company was short before the purchase, is at the center of the conflict between Musk and the existing leadership system. 

The conflict is an illustration of the larger cultural and managerial conflict between the aggressive and fast-moving approach to management adopted by Musk and the supposedly more methodical model of corporate governance adopted by the previous administration.

The Broader Impact on X Corp

The settlement can be seen as a move by Elon Musk to reduce distractions and stabilize X Corp after a lengthy period of controversy. Although Musk has embarked on the rebranding of Twitter into a multipurpose application that would combine social media, payment gateways, and communication applications, there are ongoing legal battles that have resulted in a cloud over the image of the company.

On the monetary front, the settlement will barely have a large negative impact on Musk, who is the richest person in the world. However, the frequent nature of lawsuits and later resolutions may damage investor confidence in the long-term security of X Corp. 

An increasing number of observers have expressed the view that Musk has been covertly eroding the internal structural integrity of the platform through his cost-cutting measures, as well as his unpredictable leadership style and high turnover rates.

The severance controversies also represent an example of how managerial style of Musk does not match the traditional principles of corporate governance. Opponents believe that Musk often makes rash decisions and ignores the time-honored employment principles, the proponents of his actions assert that his risk-taking nature and willingness to break the rules spur innovation in his companies.

Responses and Future Prospects

The settlement will likely offer relief to Agrawal and the other executives following three years of public and legal challenges. In the case of X Corp, the solution can provide them with a chance to move on without the aid of a high-profile court case monopolizing the news cycle.

Nevertheless, there are still a number of challenges. Still struggling to increase revenue, regain user trust, and balance the notion of free speech and responsible moderation, the organization is under pressure to maintain a smaller number of workers and operate in an environment with a less stable brand identity.

To Musk, this case is one more reminder that aggressive managerial practices and fast decisions may involve costly consequences. His attention has changed to make X an everything app, but the line of legal settlements shows that not all of his previous choices when acquiring Twitter still have their costs.

Assumption

The agreement between Elon Musk and X Corp and the ex-Twitter executives is an indication of the end of a hefty battle over the issue of unpaid severance amounting to 128 million. 

The details are not disclosed, but the case highlights the challenges Musk has had to face since he took over the leadership of Twitter and demonstrates how his leadership approach affected the stability and reputation of the corporation.

With the continuation of the change in X, the way it is handled by the management of Musk in dealing with previous and future legal issues will be influential in the way investors, users, and employees view the platform. 

Currently, by ending this chapter, the two parties have a chance to continue their move, but at the same time, they are bringing bigger questions of accountability, corporate culture, and leadership in one of the most tightly scrutinized businesses in the world.