Note 13. Restructuring and Related Charges

The Company has initiated various restructuring events primarily intended to reduce its costs, consolidate operations, streamline product manufacturing and address market conditions. The Company’s restructuring charges primarily include severance and benefit costs to eliminate a specific number of positions, facilities and equipment costs to vacate facilities and consolidate operations, and lease termination costs. The timing of associated cash payments is dependent upon the type of restructuring charge and can extend over multiple periods.

As of June 30, 2018 and July 1, 2017, the Company’s total restructuring accrual was $7.5 million and $11.0 million, respectively. During fiscal years 2018, 2017 and 2016 the Company recorded restructuring and related charges of $8.3 million, $21.6 million and $10.5 million, respectively.

Summary of Restructuring Plans

The adjustments to the accrued restructuring expenses related to all of the Company’s restructuring plans described below for the fiscal year ended June 30, 2018 were as follows (in millions):



	Balance as of July 1, 2017		Fiscal Year 2018 Charges (Releases)			Cash Settlements			Non-cash Settlements and Other Adjustments		Balance as of 6/30/2018
Fiscal 2018 Plan
Trilithic Restructuring Plan (1) (2)	$	—	$	3.3		$	(0.6	)	$	0.2	$	2.9
Fiscal 2017 Plan
OSP Restructuring Plan (1)	0.8		0.1			(0.9		)	—		—
Focused NSE Restructuring Plan (1) (2)	4.9		4.4			(7.8		)	0.4		1.9
Other Plans (2)	—		0.5			(0.6		)	0.1		—
Fiscal 2016 Plan
NE, SE and Shared Services Agile Restructuring Plan (1) (2)	0.2		(0.1		)	(0.1		)	—		—
NE and SE Agile Restructuring Plan (1)	0.4		0.1			—			—		0.5
Plans Prior to Fiscal 2016
NE Product Strategy Restructuring Plan (1)	0.9		—			(0.5		)	—		0.4
NE Lease Restructuring Plan (2)	2.6		—			(1.4		)	—		1.2
Other Plans (1) (2)	1.2		—			(0.6		)	—		0.6
Total	$	11.0	$	8.3		$	(12.5	)	$	0.7	$	7.5


(1)	Plan includes workforce reduction cost.


(2)	Plan includes lease exit cost.

The long-term portion of our total restructuring liability for the June 30, 2018 and July 1, 2017 periods is $0.1 million and $2.2 million, respectively. The remaining portion has been included as a component of Other current liabilities on the Consolidated Balance Sheets.

Fiscal 2018 Plans

Trilithic Restructuring Plan Q2FY18

During the second quarter of fiscal 2018, Management approved a plan within the NE business segment to consolidate and integrate Trilithic. As a result, $3.3 million of which $2.3 million is for lease termination costs and $1.0 million in severance costs for approximately 40 employees primarily in manufacturing and SG&A functions located in the United States. Payments related to the lease exit costs and severance and benefits accrual are expected to be paid by the end of the first quarter of fiscal 2019.

Fiscal 2017 Plans

OSP Restructuring Plan

During the fourth quarter of fiscal 2017, Management approved a plan within the OSP business segment to realign its operations and exit from the printed security business. As a result, approximately 30 employees in manufacturing and SG&A functions located in the United States were impacted. Payments related to the severance and benefits accrual were paid by the end of the third quarter of fiscal 2018.

Focused NSE Restructuring Plan

During fiscal 2017, Management approved a plan within the NE and SE business segments as part of VIAVI’s continued strategy to improve profitability in the Company’s Network and Service Enablement (NSE) business by narrowing the scope of the Service Enablement business and reducing costs by streamlining NSE operations. During the second and fourth quarters of fiscal 2018, the headcount impacted by this plan increased by approximately 60 employees. In total, approximately 360 employees in manufacturing, R&D and SG&A functions located in North America, Latin America, Europe and Asia were impacted. Payments related to the severance and benefits accrual are expected to be paid by the end of the first quarter of fiscal 2019. During the third quarter of fiscal 2017, Management approved a plan in the NE and SE segment to exit the space in Colorado Springs, Colorado. As of September 30, 2017, the Company exited the workspace in Colorado Springs under the plan. Payments related to the Colorado lease costs were paid by the end of the third quarter of fiscal 2018.

Fiscal 2016 Plans

NE, SE and Shared Service Agile Restructuring Plan

During the fourth quarter of fiscal 2016, Management approved a plan within the NE and SE business segment and Shared Services function for organizational alignment and consolidation as part of the Company’s continued commitment for a more cost effective organization. As a result, approximately 170 employees primarily in manufacturing and SG&A functions located in North America, Latin America, Europe and Asia were impacted. Payments related to the remaining severance and benefits accrual were paid by the end of the first quarter of fiscal 2018.

NE and SE Agile Restructuring Plan

During the second quarter of fiscal 2016, Management approved a plan primarily impacting the NE and SE business segments as part of Company’s ongoing commitment for an agile and more efficient operating structure. As a result, approximately 40 employees primarily in manufacturing, R&D and SG&A functions located in North America, Latin America, Europe and Asia were impacted. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the fourth quarter of fiscal 2019.

Plans Prior to Fiscal 2016

NE Product Strategy Restructuring Plan

During the third quarter of fiscal 2014, Management approved a NE plan to realign its services, support and product resources in response to market conditions in the mobile assurance market and to increase focus on software products and next generation solutions through acquisitions and R&D. As a result, approximately 60 employees primarily in SG&A and manufacturing functions located in North America, Latin America, Asia and Europe were impacted. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the first quarter of fiscal 2020.

NE Lease Restructuring Plan

During the second quarter of fiscal 2014, Management approved a NE plan to exit the remaining space in Germantown, Maryland. As of June 28, 2014, the Company exited the space in Germantown under the plan. The fair value of the remaining contractual obligations, net of sublease income, as of June 30, 2018 was $1.2 million. Payments related to the Germantown lease costs are expected to be paid by the end of the second quarter of fiscal 2019.

As of June 30, 2018, the restructuring accrual for other plans that commenced prior to fiscal year 2016 was $0.6 million, which consists of immaterial accruals from various restructuring plans.