Organization Realignment and Restructuring

3 Months Ended

Mar. 31, 2024

Restructuring and Related Activities [Abstract]

Organization Realignment and Restructuring

NOTE 4 — Organization Realignment and Restructuring

On January 29, 2024, the Company’s Board of Directors approved an organizational realignment and restructuring plan to expand the Company’s support operations at its Phoenix, Arizona office. As part of this large-scale initiative, the Company will relocate certain of its support center staff from the Grants Pass, Oregon headquarters to the Phoenix office, and anticipates that by January 1, 2025, approximately 40% of the Company’s total support operations staff will be located in Phoenix, Arizona. All affected employees were either offered an opportunity to continue employment in the Phoenix office or were offered a severance package; these communications were largely completed by February 9, 2024. The Company expects to incur total aggregate charges of approximately $24 million to $31 million related to this initiative, consisting of (i) approximately $19 million to $26 million in employee-related costs, including relocation, retention and transition costs, termination benefits, and duplicate transition wages and benefits; and (ii) approximately $5 million in other charges, including consulting fees and costs. Substantially all of the estimated charges are expected to result in current and future cash expenditures.

The Company records severance related to this initiative as a one-time termination benefit and recognizes the expense ratably over the employees’ required future service period.

For any lease terminations that may occur, the Company would write-off the right-of-use assets and lease liabilities, including any applicable penalties, as of the date the parties to the lease agree to its termination. For any lease abandonments, the Company would reassess the right-of-use assets’ useful lives as of the date the Company decides to abandon the lease and would recognize accelerated amortization over the period from the decision date to the date the Company expects to cease use of the asset. Any lease liabilities related to abandoned leases would continue to be amortized over the original lease term until and unless the terms of the lease are modified.

All other costs, including other employee transition costs, recruitment and relocation costs, and third-party costs, are recognized in the period incurred.

During the three months ended March 31, 2024, the Company recorded restructuring charges for employee-related costs of $2.6 million in selling, general and administrative expense on the condensed consolidated statement of operations related to one-time termination benefits and relocation costs as follows:


(in thousands)	Three Months Ended March 31, 2024
Relocation and travel costs	$	2,429
One-time termination benefits	196
Total restructuring costs incurred	$	2,625

As of March 31, 2024, the accruals for our corporate restructuring costs are included in accounts payable, accrued compensation and benefits, and accrued expenses on the condensed consolidated balance sheet and totaled approximately $2.1 million. The following table summarizes the activity included in our restructuring liability for the three months ended March 31, 2024:


(in thousands)	Liability, December 31, 2023		Charges		Cash Payments		Liability, March 31, 2024
Relocation and travel costs	$	—	$	2,429	$	(522)	$	1,907
One-time termination benefits	—		196		—		196
Totals	$	—	$	2,625	$	(522)	$	2,103