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Restructuring, Severance and Related Charges

3 Months Ended

Nov. 30, 2020

Restructuring and Related Activities [Abstract]

Restructuring, Severance and Related Charges

Restructuring, Severance and Related Charges

Following is a summary of the Company’s restructuring, severance and related charges (in thousands):

			Three months ended
			November 30, 2020						November 30, 2019
Employee severance and benefit costs			$	568					$	18,781
Lease costs			(2,873)						239
Asset write-off costs			(2)						16,316
Other costs			592						9,915
Total restructuring, severance and related charges(1)			$	(1,715)					$	45,251

(1)Primarily relates to the 2020 Restructuring Plan, and includes $(3.0) million and $17.4 million recorded in the EMS segment, $1.0 million and $25.2 million recorded in the DMS segment and $0.3 million and $2.7 million of non-allocated charges for the three months ended November 30, 2020 and 2019, respectively. Except for asset write-off costs, all restructuring, severance and related charges are cash costs.

2020 Restructuring Plan

On September 20, 2019, the Company’s Board of Directors formally approved a restructuring plan to realign the Company’s global capacity support infrastructure, particularly in the Company’s mobility footprint in China, in order to optimize organizational effectiveness. This action includes headcount reductions and capacity realignment (the “2020 Restructuring Plan”). The 2020 Restructuring Plan reflects the Company’s intention only and restructuring decisions, and the timing of such decisions, at certain locations are still subject to consultation with the Company’s employees and their representatives.

Upon completion of the 2020 Restructuring Plan, the Company expects to recognize approximately $85.0 million in restructuring and other related costs. The Company incurred $76.9 million of costs during fiscal year 2020 and anticipates incurring the remaining costs during fiscal year 2021 for employee severance and benefit costs, asset write-off costs, and other related costs.

The table below summarizes the Company’s liability activity, primarily associated with the 2020 Restructuring Plan

(in thousands):

			Employee Severance and Benefit Costs						Lease Costs						Asset Write-off Costs						Other Related Costs						Total
Balance as of August 31, 2020			$	8,143					$	2,316					$	—					$	426					$	10,885
Restructuring related charges			264						(2,873)						(2)						497						(2,114)
Asset write-off charge and other non-cash activity			—						1,554						2						—						1,556
Cash payments			(4,525)						(56)						—						(171)						(4,752)
Balance as of November 30, 2020			$	3,882					$	941					$	—					$	752					$	5,575

The Company’s liability associated with the worldwide workforce reduction is $27.5 million as of November 30, 2020.

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- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 420
-URI http://asc.fasb.org/topic&trid=2175745

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