RESTRUCTURING

We initiated a targeted workforce reduction program in July 2015 that is expected to reduce Keysight's total headcount by approximately 104 employees, representing approximately 1 percent of our global workforce. The timing and scope of workforce reductions will vary based on local legal requirements. This targeted workforce management program is designed to restructure our operations and cost structure for optimization of resources and cost savings.

We also announced a Pre-retirement notification program for retirement-eligible employees to provide early notice of their planned retirement in return for severance benefits. The program is entirely voluntary and can be initiated only by an employee. Approximately 160 employees of our total workforce opted for early retirement under this program as of October 31, 2015.

When completed, the restructuring programs are expected to result in operational savings and efficiency while maintaining our focus on growing the business. We expect to complete a majority of these actions by the end of first quarter of fiscal year 2016.

A summary of balances and restructuring activity is shown in the table below:



	Workforce reduction			U.S. Pre-retirement Plan
	(in millions)
Balance as of October 31, 2014	$	1		$	—
Income statement expense	8			8
Cash payments	(5		)	(6		)
Balance as of October 31, 2015	$	4		$	2

The restructuring accrual of $4 million at October 31, 2015 relating to workforce reduction are recorded in other accrued liabilities, and $2 million related to the Pre-Retirement Notification program is included in employee compensation and benefits in the condensed consolidated balance sheet.

A summary of the charges in the consolidated statement of operations resulting from all restructuring plans is shown below:



	Year ended
	October 31,
	2015		2014

Cost of products and services	$	4	$	(1	)
Research and development	2		(1		)
Selling, general and administrative	10		(1		)
Total restructuring and other related costs	$	16	$	(3	)