Elon Musk is one of the wealthiest people on earth and has made a significant contribution, alongside his employees, to advancing technological developments via achievements with PayPal, Tesla and SpaceX. As part of his self-declared quest to ‘help humanity’, he acquired Twitter and became responsible for around 7,400 employees. But the milestones below do not make for happy reading:
Six days after acquisition sources relayed he intended to halve its workforce by offering three months’ severance. He also looked to reverse the company's existing work-from-anywhere policy in an attempt to change its culture.
13 days after the takeover Musk banned remote work, and reportedly warned employees of bankruptcy.
20 days into the regime Musk apparently emailed staff stating that those continuing to work for Twitter had to be willing to be part of an ‘extremely hardcore’ culture, with long hours and working at a high intensity. If this wasn’t agreed by 5pm the following day, then employees had to leave with three months’ severance pay.
Initial reaction
People around the world have looked on in disbelief at the new direction this formally aspirational tech employer is being taken in and questioned whether it is legal.
Early in the regime change a class action lawsuit was filed against Twitter, accusing it of violating the US’s federal Worker Adjustment and Retraining Notification Act 1988, which requires large companies to give at least 60 days of advance notice before mass layoffs.
Across the pond in the UK, trade union Prospect, which represents a third of the country’s Twitter workers, has written to the social media giant expressing its concerns over Musk’s restructuring of the company – particularly around the lack of a redundancy consultation process.
Indeed, it has brought back memories of the approximately 800 employee redundancies made digitally by P&O Ferries in March this year via a video recording, where they were dismissed with immediate effect without notice.
Neither approach exactly epitomises the transparent, fair and honest approach required and expected when making decisions that dramatically impact people’s lives.
Advice for UK-based organisations
We don’t yet know whether Twitter will be subject to a costly legal process, and it’s a reminder that leaders and organisations must be cautious when approaching any of these employment issues.
Contracts are key and can include discrepancies and non-traditional clauses, but typically an employee can be made redundant for any or no reason within the first two years of employment. After this period efforts must still be made to find a suitable role within the organisation. But if there is not a suitable position available and it can be demonstrated that the employee’s job will no longer exist, then redundancy can be made with appropriate severance pay if legal consultation periods have been followed.
Care must be taken not to discriminate against a group of employees, such as those with additional needs including parental or carer responsibilities. Any intentional or perceived bias can lead to claims for uncapped compensation.
Policy changes around working from home, hybrid working and other employee rights are also best made after a period of consultation with employees.
Of course, you must be mindful of how this will affect recruitment and retention. In the case of Twitter, competitors are already benefiting from securing the services of experienced engineering talent by contrasting their approaches to work-life balance and flexibility with Musk’s.
It is ironic that the ‘Chief Twit’s’ comment about acquiring Twitter to ‘help humanity’ clearly doesn’t hold weight when there’s been so little compassion demonstrated towards one of the company’s main stakeholders – it’s employees.
HR teams that find themselves needing to make significant changes must do whatever is in their power to secure the best legal counsel possible while ensuring they plan and communicate as effectively and sympathetically as they can.
Sadly, future layoffs and policy changes are likely on the horizon based on the global economic outlook; all we can hope is that leaders like Tesla’s CEO aren’t behind the wheel. It is very disappointing that someone with such an exceptional talent to build businesses cannot replicate, communicate or understand how to build a workforce and maintain one. After all, we all know the workforce is the business.
Thalis Vlachos is an employment partner at international law firm gunnercooke