Employee Termination, Asset Impairment, and Other

6 Months Ended

Dec. 29, 2023

Employee Termination, Asset Impairment, and Other

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 of organization rationalization designed to streamline its business, reduce its cost structure and focus its resources. In this regard, in the six months ended December 29, 2023, the Company reassessed existing capacity development plans and made a decision to cancel certain projects to expand capacity in its Penang, Malaysia facility, resulting in the impairment of existing construction in progress and the recognition of a liability for certain contract termination costs. The Company has also taken actions to reduce the amount of capital invested in facilities, including the sale-leaseback of its facility in Milpitas, California in September 2023. The Company recorded the following net charges related to these actions for the periods noted below:


	Three Months Ended				Six Months Ended
	December 29, 2023		December 30, 2022		December 29, 2023		December 30, 2022
	(in millions)




Employee termination benefits	$	24	$	61	$	43	$	85









Contract termination and other	—		—		29		—
Asset impairments	—		15		94		15

Gain on sale-leaseback of facility	—		—		(85)		—


Total employee termination, asset impairment, and other charges	$	24	$	76	$	81	$	100

The following table presents an analysis of the components of these activities against the reserve during the six months ended December 29, 2023:


	Employee Termination Benefits		Contract Termination and Other		Total
	(in millions)
Accrual balance at June 30, 2023	$	31	$	5	$	36
Charges	43		29		72
Cash payments	(57)		(3)		(60)

Accrual balance at December 29, 2023	$	17	$	31	$	48