Employee Termination, Asset Impairment, and Other

3 Months Ended

Sep. 27, 2024

Employee Termination, Asset Impairment, and Other

Business Realignment

The Company periodically incurs charges 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. The Company may also record credits related to gains upon sale of property in connection with these activities. In this regard, for the three months ended September 29, 2023, the Company reassessed existing capacity development plans and made a decision to cancel certain projects, including projects to expand capacity in its Penang, Malaysia facility, resulting in the impairment of existing construction in progress, other assets and the recognition of a liability for certain contract termination costs. The Company also took 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 presented:


	Three Months Ended
	September 27, 2024		September 29, 2023
	(in millions)
Employee termination benefits	$	—	$	19
Asset impairments	—		94
Other charges (gains):

Contract termination and other	2		29
Gain on sale-leaseback of facility	—		(85)
Total employee termination, asset impairment, and other	$	2	$	57

The following table presents an analysis of the components of these activities against the reserve (included in Accrued expenses) during the three months ended September 27, 2024:


	Contract Termination and Other
	(in millions)
Accrual balance at June 28, 2024	$	28
Charges	2
Cash payments	(3)

Accrual balance at September 27, 2024	$	27