Just hours after Musk finalized his $44 billion purchase of the social media platform on Oct. 28, he summoned a number of his top HR executives and told them to get ready for massive layoffs, The New York Times reports, citing six people familiar with the incident. Musk told the executives that those being let go would not get bonuses. Musk also disregarded his executives’ warnings that his plan could run afoul of employment laws and violate contracts with employees, which could turn into worker lawsuits, the people said. But Musk’s team was not concerned about those risks.
In the first week of November, Musk laid off about half of Twitter’s workforce by contacting the employees on their personal emails, Human Resource Executive reports. i4cp (Institute for Corporate Productivity), a global human capital research company, conducted a survey of 400 HR leaders and professionals about Musk’s actions just hours after the layoffs were announced. Nearly 75% of the survey respondents said they would not take an HR position at Twitter, while 67% said Musk had managed the situation badly. “Our research confirms an unmistakable link between a healthy culture and bottom-line business impact,” says Kevin Oakes, CEO of i4cp.
Twitter’s HR head Kathleen Pacini quit Nov. 10, Human Resource Executive reports. Yoel Roth, who led trust and safety, also quit that day. Dalana Brand, who served as chief people and diversity officer, announced Nov. 1 that she was done with Twitter. Five former Twitter employees filed a class-action lawsuit Nov. 3 against the company alleging that their former employer violated state and federal Worker Adjustment and Retraining Act (WARN) because Twitter did not notify them before the layoffs. The former workers also claim that they are entitled to receive two months of pay and benefits.
“It seems like they announced without any planning or forethought,” Charles Krugel, a management-side labor and employment lawyer and HR counselor based in Chicago, told Human Resource Executive. “It’s more humanistic and professional.”
“Based on the fact that WARN Act lawsuits are being filed, it … doesn’t appear that Twitter contemplated this ahead of time," he added.
Musk also did an about-face from Twitter’s policy in 2020 when the platform announced early during the COVID-19 pandemic that employees could work remotely “forever.”
“So if our employees are in a role and situation that enables them to work from home and they want to continue to do so forever, we will make that happen,” Twitter’s then HR head, Jennifer Christie, wrote in a May 12, 2020 blog post on the company’s website. “If not, our offices will be their warm and welcoming selves, with some additional precautions, when we feel it’s safe to return.”
Christie resigned from Twitter in January this year and is now chief people officer at DocuSign.
Musk’s actions after taking over Twitter are “definitely an anomaly,” said Ayesha Whyte, attorney and chief people officer at human resources and law firm Dixon Whyte, as reported by HR Dive. The way Musk has treated employees is especially bad during an acquisition when you end up losing the “critical knowledge of those working there for years,” Whyte said.
“Him becoming CEO happened very quickly, and he’s making a lot of business decisions, not keeping in mind the people who need to implement those changes,” Whyte noted. “Elon is at a place where he doesn’t know who does what at his company. If they leave, he doesn’t know how to replace them. Knowledge management in tech is paramount.”
David Lewis, president and CEO of OperationsInc, an HR consulting firm based in Norwalk, Conn., said Musk has demonstrated no ability or interest in understanding the workplace culture he took over or what employees’ have contributed, TechTarget reports. “He's just looking at this as a numbers game," Lewis said.
“There's no way to look at this and see a plan," he added. If you are an HR leader, "your head keeps shaking every time you read the latest about what's going on over there.”
While CEOs are at liberty to switch up their firm’s culture and work hours, they also need to be mindful of compliance matters from such changes, says Qiaojing Ella Zheng, co-managing partner of Sanford Heisler Sharp's Palo Alto and San Francisco offices.
It is not enough for Musk to tell employees that if they want to continue working at Twitter they need to be “hardcore.” The company needs to define “what counts as a hardcore” workplace separate from long work hours, Zheng said. And demanding workers put in long hours also can be problematic, for example, if Twitter mandates this of employees when it runs contrary to what their physicians recommend, Zheng added. “The employees would be entitled to bring disability discrimination claims,” she said.
Musk’s approach also may haunt him for a long time when it comes to wooing future talent to Twitter, Vox reported. “Why would anyone want to go work at a place where they’ve just treated people poorly?” asks Robin Erickson, vice president of human capital at Conference Board. His organization examines how companies behave in crisis. “Those organizations that laid off employees will have a harder time rebounding as they try to hire employees,” Erickson said.