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Shortly after Elon Musk worried about Twitter’s future, the company began hiring high-ranking employees and lowering prices “by any means necessary,” according to a new lawsuit.
Ethan Sutin, who became Twitter’s head of engineering after the company acquired Squad, an app he co-founded, is suing the platform now called X over his firing in May last year. He claims that his dismissal was not only “pretextual,” or founded on false reasoning for a predetermined outcome, but was also aimed at avoiding paying him in full what he was owed under the agreement with Squad and his upcoming job.
Twitter’s stock, or X, is “unfortunately a component of a tendency to evade monetary obligations,” according to the lawsuit filed Friday in a San Francisco court.
Twitter acquired Squad in late 2020, in a cash-and-stock deal worth $36 million, Sutin said. The value of the acquisition has not been previously disclosed. The app’s other founder is Esther Crawford, who became Twitter’s head after the acquisition. Crawford went viral online after Musk quit Twitter last October for a photo showing her in a sleeping bag on the floor of the company’s headquarters, as some workers tried to meet Musk’s new “unconditional” demands and keep their jobs. Crawford was fired a few months later.
Squad was a video chat platform founded in 2016 that allowed users to share their screens with other users. It became more popular in the early months of the Covid-19 pandemic, when other people around the world were forced to avoid in-person gatherings and public gatherings. Squad’s growing popularity “caught the attention” of Twitter, according to the lawsuit, and was acquired soon after.
Sutin said his firing last year came shortly after Parag Agrawal, Twitter’s former chief executive, fired other employees and senior executives. As reported on his “for cause” dismissal, under Squad’s acquisition agreement, Twitter said it was not obligated to pay him $1. 3 million in cash as payment for the acquisition or pay him more than 80,000 limited shares. Sutin says his firing is just part of an effort via Twitter “to reduce prices through any means necessary. “
Weeks before Sutin was fired, Musk proposed buying Twitter for $44 billion, immediately sinking the company into a now-notoriously chaotic acquisition. Agrawal, who was still running the company at the time, was already cutting expenses by freezing hiring and other costs. According to the lawsuit, “mass layoffs” were also being discussed.
As soon as Musk officially acquired Twitter, he ousted its entire leadership, adding Agrawal. Musk has since claimed the firings were “motivated” and refused to honor the gigantic sums Agrawal and his executives were to receive. He also refused to pay severance pay. to the rank-and-file workers whom he fired by the thousands.
Sutin’s functionality evaluations have been consistently positive and he has been praised by Kayvon Keykpour, one of Agrawal’s fired executives last May, as “the company’s top productive engineering leader,” according to the lawsuit. Sutin said he led the creation of Twitter’s “advice” feature, its first monetization tool for creators, as well as the underlying payment procedure formula (using Stripe) that enabled the creation of ticketedArray and Twitter Blue super fans. Sutin said he also created the app for creators to apply with ticket and super tracking, as well as the NFT verification procedure.
When Sutin fired on May 16 last year, he said so for “problematic interpersonal conduct,” adding a “brusque and aggressive” manner toward his teammates and “unjustified and insistent demands” from his teams. Sutin has denied all those claims, detailing times when he was a “manager forced to manage” employees, and his moves never met Twitter’s definition of “abusive conduct” in his office policy.
In addition to paying what he is still owed in money and inventory for the Squad acquisition, Sutin is asking the court for damages and an order requiring Twitter to classify his dismissal as cause.
An X spokesperson may be contacted for comment.
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