Restructuring and Other Charges and Disposition of Businesses and Related Assets

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

Restructuring and Other Charges and Disposition of Businesses and Related Assets

In February 2023, we announced a restructuring plan to reduce future operating expenses and improve cash flows through a combination of a reduction in force and a commitment to sell certain assets. As part of this plan, we announced a reduction in our workforce of approximately 550 employees, representing approximately 8% of our total employees. In conjunction with this restructuring, during the nine months ended September 30, 2023, we recorded $34.6 million of pre-tax restructuring charges in our statement of operations related to severance, employee benefits and equity-based compensation, $0.8 million of which was recognized during the third quarter. In addition, we recognized a pre-tax loss of $16.8 million upon the completion of the planned disposition of certain assets and liabilities of our hosting business within our Core segment, which occurred on June 30, 2023.

During the three months ended September 30, 2023, we implemented additional restructuring activities to further reduce operating expenses and improve cash flows through a reduction in force, which impacted approximately 250 employees. In conjunction with these restructuring efforts, we recognized $9.2 million of pre-tax restructuring charges in our statement of operations related to severance and employee benefits.

We estimate that we will incur up to an additional $4.7 million in restructuring charges related to our restructuring activities, primarily during the fourth quarter of 2023. We do not expect to incur additional restructuring charges beyond the first quarter of 2024.

Cash payments of $31.4 million related to the restructuring activities described above were made during the nine months ended September 30, 2023. We expect to make substantially all remaining restructuring payments by the end of the first quarter of 2024.

The following table shows the total amount incurred and the accrued restructuring costs, which are recorded in accrued expenses and other current liabilities in our balance sheet, for severance and employee benefits as of September 30, 2023:


	Accrued Restructuring Costs
Accrued restructuring costs as of December 31, 2022	$	—
Restructuring costs incurred during the nine months ended September 30, 2023(1)	41.5
Amount paid during the nine months ended September 30, 2023	(31.4)
Accrued restructuring costs as of September 30, 2023	$	10.1

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(1)Excludes $2.3 million in equity-based compensation expense associated with our restructuring plan, which was recorded within additional paid-in capital.

During the nine months ended September 30, 2023, we also recorded a charge of $17.0 million in our statement of operations related to the termination of a revenue sharing agreement. This termination fee was paid in full during the second quarter of 2023.