Restructuring Activities

12 Months Ended

Dec. 31, 2022

Restructuring and Related Activities [Abstract]

Efficiency and Cost Reduction - 2022 Activities

During the third quarter of 2022, we launched certain cost and operational efficiency initiatives that will further improve the company’s resiliency in an economic downturn while enabling continued operating platform investments that support future growth. The efficiency initiatives include management and workforce structure simplification, occupancy footprint rationalization and certain third-party spending reductions. As part of this, we incurred certain cash and non-cash charges. Non-cash charges are primarily associated with acceleration of depreciation and write-down of lease and related assets as part of our lease termination activities. Cash-based charges are primarily related to employee separation, lease exit costs, and professional fees. During the year ended December 31, 2022, total charges (excluding depreciation) incurred were $117.5 million, related to employee separation, lease termination, and professional fees. Management continues to evaluate and modify these initiatives, which are likely to continue over the next few months. The following table presents the detail of expenses incurred by segment (dollars in thousands):


	Year Ended December 31, 2022
	Advisory Services		Global Workplace Solutions		Real Estate Investments		Corporate		Consolidated
Employee separation benefits	$	32,594	$	19,961	$	9,761	$	19,198	$	81,514
Lease exit costs	9,695		2,916		—		—		12,611
Professional fees and other	3,446		5,040		2,738		12,185		23,409
Subtotal	45,735		27,917		12,499		31,383		117,534
Depreciation expense	5,564		3,258		—		—		8,822
Total	$	51,299	$	31,175	$	12,499	$	31,383	$	126,356

The following table shows ending liability balance associated with major cash-based charges (dollars in thousands):


	Employee separation benefits		Professional fees
Balance at January 1, 2022	$	—	$	—
Expense incurred	81,514		23,409
Payments made	(44,500)		(12,809)

Balance at December 31, 2022	$	37,014	$	10,600

Ending balance related to employee separation was included in “compensation and employee benefits payable” and the balance related to professional fees and other was included in “accounts payable and accrued expenses” in the accompanying consolidated balance sheets. Of the total charges incurred, net of depreciation expense, $33.4 million was included within the “Cost of revenue” line item and $84.1 million was included in the “Operating, administrative, and other” line item in the accompanying consolidated statement of operations for the year ended December 31, 2022.

We did not incur significant restructuring charges during the year ended December 31, 2021.

Transformation and Workforce Optimization - 2020 Activities

During the third quarter of 2020, management embarked on the implementation of certain transformation initiatives to enable the company to reduce costs, streamline operations and support future growth.

As part of these initiatives, we incurred the following costs, primarily in cash, for the year ended December 31, 2020 (dollars in thousands):


	Year Ended December 31, 2020
	Advisory Services				Global Workplace Solutions		Real Estate Investments		Consolidated
Employee separation benefits	$	57,550	$	57,550	$	31,083	$	2,444	$	91,077
Lease termination costs	43,225				4,586		—		47,811
Professional fees and other	13,212				2,510		538		16,260
Subtotal	113,987				38,179		2,982		155,148
Depreciation expense	14,184				166		6,342		20,692
Total	$	128,171			$	38,345	$	9,324	$	175,840

Of the total charges incurred, net of depreciation expense, $42.1 million was included within the “Cost of revenue” line item and $113.0 million was included in the “Operating, administrative, and other” line item in the accompanying consolidated statement of operations for the year ended December 31, 2020.