A US federal court, on Friday, concluded that the social media platform Twitter, now operating under the brand X, breached agreements by not fulfilling promised annual performance bonuses to its employees.

The breach-of-contract lawsuit was filed by former employee Mark Schobinger in June, asserting that Twitter had assured employees of a 2022 performance bonus if they remained with the company until the final potential payout date in the first quarter of the year. The court dismissed Twitter's attempts to dismiss the case, affirming Schobinger's claim of contract breach under California law.

"Schobinger has plausibly presented a breach of contract allegation under California law. He claims that Twitter verbally committed to providing each employee with a share of the anticipated bonus," stated US District Judge Vince Chhabria.

"By allegedly declining to honor Schobinger's pledged bonus, Twitter violated the terms of that agreement," the judge concluded.

X retains the option to challenge the court's ruling.

The social network, now owned by Elon Musk, is encountering various challenges, including an EU investigation under legislation aimed at combating misinformation and hate speech. Additionally, the platform has faced criticism for its handling of recent unrest in Dublin and has witnessed major advertisers leaving.

Internal documents sent to staff, as reported by tech outlet The Verge, indicate that the company's current value is now less than half of the $44 billion Musk paid for it in October 2022.

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