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Restructuring | 6 Months Ended
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Nov. 30, 2020
Restructuring and Related Activities [Abstract] |
Restructuring |
NOTE 14 —RESTRUCTURING
During the first quarter of fiscal 2021, the Company announced a new digitally empowered phase of its Consumer Direct Offense strategy: Consumer Direct Acceleration. As a result, management announced a series of leadership and operating model changes to streamline and speed up strategic execution for the Company. These changes will result in a net reduction of the Company's global workforce and the Company expects to incur pre-tax charges of approximately $315 million, the majority of which relate to employee termination costs and, to a lesser extent, stock-based compensation expense. These amounts reflect the continued evaluation and variability of the Company's original estimate of employee termination costs and required changes in assumptions used to calculate stock-based compensation expense. The related cash expenditures will primarily take place throughout fiscal 2021 and all related actions are expected to be substantially complete by the end of fiscal 2021. During the three months ended November 30, 2020, the Company recognized employee termination costs of $107 million and $30 million within Operating overhead expense and Cost of sales, respectively, on the Unaudited Condensed Consolidated Statements of Income. During the six months ended November 30, 2020, the Company recognized employee termination costs of $145 million and $30 million within Operating overhead expense and Cost of sales, respectively. These costs were classified within Corporate. The activity was recognized within Accrued liabilities as follows:
(Dollars in millions) |
Balance at August 31, 2020 | $ | 34 |
Employee termination costs | 137 |
Cash payments | (67) |
Balance at November 30, 2020 | $ | 104 |
(Dollars in millions) |
Balance at May 31, 2020 | $ | — |
Employee termination costs | 175 |
Cash payments | (71) |
Balance at November 30, 2020 | $ | 104 |
Additionally, the related stock-based compensation expense recorded within Operating overhead expense and Costs of sales was $30 million and $4 million, respectively, for the three months ended November 30, 2020, and $39 million and $4 million, respectively, for the six months ended November 30, 2020

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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