Reorganization of Business

6 Months Ended

Jul. 01, 2023

Restructuring and Related Activities [Abstract]

2023 Charges

During the three months ended July 1, 2023, the Company recorded net reorganization of business charges of $3 million, including $5 million of charges in Other charges and $2 million of reversals recorded in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $3 million were charges of $9 million related to employee separation costs, partially offset by $5 million of reversals for exit cost accruals no longer needed and $1 million of reversals for employee separation accruals no longer needed.

During the six months ended July 1, 2023, the Company recorded net reorganization of business charges of $16 million, including $12 million of charges in Other charges and $4 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $16 million were charges of $24 million related to employee separation costs, partially offset by $5 million of reversals for exit cost accruals no longer needed and $3 million of reversals for employee separation accruals no longer needed.

The following table displays the net charges incurred by segment:



July 1, 2023	Three Months Ended		Six Months Ended

Products and Systems Integration	$	6	$	17
Software and Services	(3)		(1)
	$	3	$	16

Reorganization of Businesses Accruals


	January 1, 2023		Additional Charges		Adjustments		Amount Used		July 1, 2023
Employee separation costs	$	26	$	24	$	(3)	$	(19)	$	28
Exit costs	10		—		(5)		—		5
	$	36	$	24	$	(8)	$	(19)	$	33

Exit Costs

At January 1, 2023, the Company had an accrual of $10 million for exit costs, related to the Company's exit of the ESN contract with the Home Office in 2022. During the three months ended July 1, 2023, the Company recorded a $5 million reversal for accruals no longer needed. The $5 million of exit costs are recorded in Accrued liabilities in the Company's Condensed Consolidated Balance Sheets at July 1, 2023, and are expected to be paid within one year.

Employee Separation Costs

At January 1, 2023, the Company had an accrual of $26 million for employee separation costs. The 2023 additional charges of $24 million represent severance costs for approximately 440 employees. The adjustment of $3 million reflects reversals for accruals no longer needed. The $19 million used reflects cash payments to severed employees. The remaining accrual of $28 million, which is included in Accrued liabilities in the Company’s Condensed Consolidated Balance Sheets at July 1, 2023, is expected to be paid, primarily within one year, to approximately 550 employees, who have either been severed or have been notified of their severance and have begun or will begin receiving payments.

2022 Charges

During the three months ended July 2, 2022, the Company recorded net reorganization of business charges of $7 million, including $5 million of charges in Other charges and $2 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $7 million were charges of $11 million related to employee separation costs, partially offset by $4 million of reversals for accruals no longer needed.

During the six months ended July 2, 2022, the Company recorded net reorganization of business charges of $17 million, including $12 million of charges in Other charges and $5 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $17 million were charges of $24 million related to employee separation costs, partially offset by $7 million of reversals for accruals no longer needed.

The following table displays the net charges incurred by segment:



July 2, 2022	Three Months Ended		Six Months Ended

Products and Systems Integration	$	6	$	14
Software and Services	1		3
	$	7	$	17