Employee Termination, Asset Impairment and Other Charges

12 Months Ended

Jun. 28, 2019

Employee Termination, Asset Impairment and Other Charges

The Company recorded the following charges related to employee terminations benefits, asset impairment, and other charges:



	2019		2018		2017
	(in millions)
Employee termination and other charges:
Closure of Foreign Manufacturing Facilities	$	22	$	56	$	10
Business Realignment	144		50		72
Restructuring Plan 2016	—		92		128
Total employee termination and other charges	166		198		210
Asset impairment:
Restructuring Plan 2016	—		16		—
Closure of Foreign Manufacturing Facility	—		—		11
Total asset impairment	—		16		11
Stock-based compensation accelerations and adjustments:
Business Realignment	—		1		11
Total stock-based compensation accelerations and adjustments	—		1		11
Total employee termination, asset impairment, and other charges	$	166	$	215	$	232

Closure of Foreign Manufacturing Facilities

In July 2018, the Company announced the closing of its HDD manufacturing facility in Kuala Lumpur, Malaysia, in order to reduce its manufacturing costs and consolidate HDD operations into Thailand. The Company substantially completed the closure as of June 28, 2019. The Company incurred charges of $10 million in employee termination benefits and $12 million in contract termination and other charges in the year ended June 28, 2019 and $56 million of employee termination benefits in the year ended June 29, 2018.

The following table presents an analysis of the components of the restructuring charges, payments and adjustments made against the reserve during the year ended June 28, 2019:



	Employee Termination Benefits			Contract Termination and Other			Total
	(in millions)
Accrual balance at June 29, 2018	$	56		$	—		$	56
Charges	10			12			22
Cash payments	(36		)	(10		)	(46		)
Accrual balance at June 28, 2019	$	30		$	2		$	32

Business Realignment

The Company periodically incurs charges as part of the integration process of recent acquisitions and to realign its operations with anticipated market demand, primarily consisting organization rationalization designed to streamline our business, reduce our cost structure and focus our resources.

The following table presents an analysis of the components of the activity against the reserve during the year ended June 28, 2019:



	Employee Termination Benefits			Contract Termination and Other			Total
	(in millions)
Accrual balance at June 29, 2018	$	31		$	5		$	36
Charges	131			13			144
Cash payments	(125		)	(10		)	(135		)
Accrual balance at June 28, 2019	$	37		$	8		$	45

Restructuring Plan 2016

In 2016, the Company initiated a set of actions relating to the restructuring plan associated with the integration of substantial portions of its HGST and WD subsidiaries (“Restructuring Plan 2016”). Restructuring Plan 2016 consisted of asset and footprint reductions, product road map consolidation and organization rationalization. These actions were substantially completed in fiscal year 2018.