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Efficiency and Cost-Reduction Initiatives

6 Months Ended

Jun. 30, 2023

Restructuring and Related Activities [Abstract]

Efficiency and Cost-Reduction Initiatives

Efficiency and Cost-Reduction InitiativesDuring the third quarter of 2022, we launched certain cost and operational efficiency initiatives to 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, partially offset by release of lease liability, as part of our lease termination activities. Cash-based charges are primarily related to employee separation benefits, lease and certain contract exit costs, and professional fees. These initiatives were largely completed as of March 31, 2023.

The following table presents the detail of expense incurred by segment (dollars in thousands):


	Six Months Ended June 30, 2023
	Advisory Services		Global Workplace Solutions		Real Estate Investments		Corporate		Consolidated
Employee separation benefits	$	19,158	$	29,858	$	13,158	$	2,538	$	64,712
Lease exit costs	39,273		731		4,204		1,143		45,351
Professional fees and other	5,963		19,209		4,097		1,225		30,494
Subtotal	64,394		49,798		21,459		4,906		140,557
Depreciation expense	5,453		44		3,482		—		8,979
Total	$	69,847	$	49,842	$	24,941	$	4,906	$	149,536

Of the total expenses above, $2.3 million were incurred during the three months ended June 30, 2023 and the remaining $147.2 million were incurred during the three months ended March 31, 2023.

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


	Employee separation benefits		Professional fees and other
Balance at December 31, 2022	$	37,014	$	10,600
Expense incurred	64,712		30,494
Payments made	(77,215)		(41,094)

Balance at June 30, 2023	$	24,511	$	—

Ending balance related to employee separation benefits was included in “compensation and employee benefits payable” in the accompanying consolidated balance sheets. Of the total charges incurred, net of depreciation expense, $17.3 million was included within the “Cost of revenue” line item and $123.2 million was included in the “Operating, administrative, and other” line item in the accompanying consolidated statement of operations for the six months ended June 30, 2023.