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Restructuring, Impairments,- and Related Charges, Net of Reversals | 12 Months Ended
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Jun. 30, 2020
Restructuring And Related Activities [Abstract] |
Restructuring, Impairments,- and Related Charges, Net of Reversals | 15. Restructuring, Impairments, and Related Charges, Net of Reversals As of June 30, 2020 and June 30, 2019, restructuring liabilities were $2.2 million and $5.3 million, respectively, which are recorded in “Other accrued liabilities” and “Other long-term liabilities” in the accompanying consolidated balance sheets. The restructuring liabilities consist of obligations pertaining to the estimated future obligations for non-cancelable lease payments and severance and benefits obligations through June 30, 2019 and only severance and benefits obligations subsequent to the adoption of ASU 2016-02 Leases (Topic 842) on July 1, 2019. During years ended 2020, 2019 and 2018, the Company recorded restructuring and impairment charges, net of reversals, of $22.0 million, $5.1 million and $8.1 million, respectively. The charges are reflected in “Restructuring, impairments, and related charges, net of reversals” in the consolidated statements of operations. 2020 Restructuring and Impairment During fiscal 2020, the Company moved to reduce its operating expenses by exiting a floor in its San Jose, California headquarters facility and consolidating its workforce. Also, the Company exited additional space in its Salem, New Hampshire facility, which includes general office and lab space. The Company continued its initiative to realign its operations resulting from the acquisition of Aerohive and consolidating its workforce and exiting the facility it acquired from Aerohive in Milpitas, California which includes general office and lab space. The Company has the intent and ability to sub-lease these facilities which it has ceased using and as such, has considered estimated future sub-lease income based on its existing lease agreements, as well as the local real estate market conditions, in measuring the amount of asset impairment. The Company also factored into its estimate the time for a sub-lease tenant to enter into an agreement and complete any improvements. With the global disruptions and slow-down in the demand of its products caused by the global pandemic outbreak, COVID-19, and the uncertainty around the timing of the recovery of the market, the Company initiated a reduction-in-force plan (the 2020 Plan) to reduce its operating costs and enhance financial flexibility. The plan affected approximately 320 employees primarily from the research and development and sales organizations who were located mainly in the U.S. and India. The Company recorded restructuring charges of $8.1 million during the fiscal year ended June 30, 2020 related to the 2020 Plan. The Company expects to incur additional charges related to this 2020 Plan through the first quarter of fiscal 2021. The costs associated with this restructuring plan primarily included employee severance and benefit expenses. The Company recorded additional severance and benefits charges of $5.4 million for the fiscal year ended June 30, 2020 related to the previous year’s restructuring plans. In total the Company incurred $13.5 million in restructuring charges for the year ended June 30, 2020 which were all severance and benefit related. The Company expects the severance and benefits will be substantially paid by the end of fiscal 2021. In addition, the Company recorded facility impairment related charges of $8.5 million for the fiscal year ended June 30, 2020 which included $6.7 million for the impairment of ROU assets as referenced in the preceding paragraph, $0.9 million for impairment of long-lived assets, and $0.9 million of other charges related to previously impaired facilities. 2019 Restructuring and Impairment The Company recorded a total of $5.1 million in restructuring and impairment charges during the year ended June 30, 2019. A reduction-in-force in its fourth fiscal quarter of fiscal 2019 was announced to better align its work force and operating expenses. Costs associated with the 2019 Plan are primarily comprised of employee severance and benefits expenses, relocation of personnel and equipment and exit of excess facilities. The Company recorded $3.7 million related to employee severance and benefits expenses during the year ended June 30, 2019 under the 2019 Plan. Also, $1.1 million of additional charges related to continuation of earlier actions associated with a reduction-in-force in the fourth quarter of fiscal 2018. The Company also incurred charges of $0.3 million for changes to its estimates for accrued lease costs pertaining to the estimated future obligations for non-cancelable lease payments of its excess facilities. The amount and timing of the actual charges may vary due to required consultation activities with certain employees as well as compliance with statutory severance requirements in local jurisdictions. 2018 Restructuring and Impairment The Company announced and executed a reduction-in-force in its third and fourth fiscal quarters of fiscal 2018 as a result of the acquisitions of the Campus Fabric Business and the Data Center Business. The Company recorded $7.9 million related to employee severance and benefits expenses during the year ended June 30, 2018. The Company also incurred charges of $0.2 million for changes to its estimates for accrued lease costs pertaining to the estimated future obligations for non-cancelable lease payments of its excess facilities. Restructuring liabilities consist of (in thousands):
|  | Excess Facilities |  |  | Severance Benefits |  |  | Other |  |  | Total |
Balance as of June 30, 2017 |  | $ | 2,184 |  |  | $ | 1,853 |  |  | $ | 85 |  |  | $ | 4,122 |
Period charges |  |  | 207 |  |  |  | 7,945 |  |  |  | — |  |  |  | 8,152 |
Period reversals |  |  | — |  |  |  | — |  |  |  | (12 | ) |  |  | (12 | )
Period payments |  |  | (594 | ) |  |  | (5,140 | ) |  |  | (73 | ) |  |  | (5,807 | )
Balance as of June 30, 2018 |  | $ | 1,797 |  |  | $ | 4,658 |  |  | $ | — |  |  | $ | 6,455 |
Period charges |  |  | 254 |  |  |  | 5,274 |  |  |  | — |  |  |  | 5,528 |
Period reversals |  |  | — |  |  |  | (438 | ) |  |  | — |  |  |  | (438 | )
Period payments |  |  | (287 | ) |  |  | (5,935 | ) |  |  | — |  |  |  | (6,222 | )
Balance as of June 30, 2019 |  | $ | 1,764 |  |  | $ | 3,559 |  |  | $ | — |  |  | $ | 5,323 |
Period charges |  |  | — |  |  |  | 14,875 |  |  |  | — |  |  |  | 14,875 |
Period reversals |  |  | — |  |  |  | (1,369 | ) |  |  | — |  |  |  | (1,369 | )
Reclassification to reduce operating lease assets |  |  | (1,764 | ) |  |  | — |  |  |  | — |  |  |  | (1,764 | )
Period payments |  |  | — |  |  |  | (14,846 | ) |  |  | — |  |  |  | (14,846 | )
Balance as of June 30, 2020 |  | $ | — |  |  | $ | 2,219 |  |  | $ | — |  |  | $ | 2,219 |

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- References No definition available. + Details
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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 + Details
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