Repositioning and Other Changes

6 Months Ended

Jun. 30, 2023

Restructuring and Related Activities [Abstract]

We continually assess opportunities to improve operational effectiveness and efficiency to better align our expenses with revenues, while continuing to make investments in our solutions, systems and people that we believe are important to our long-term goals.

During the second quarter of 2023, the Company implemented a broad set of repositioning initiatives designed to further align the Company’s assets and talent towards the value-based specialty care opportunity, with the intent of streamlining its operations and supporting the goal of realizing long-term sustainable earnings growth. These initiatives include making organizational changes across the business that resulted in severance, terminated benefits and related payroll taxes and dedicated employee costs associated with recent acquisitions as well as third-party professional fees. Dedicated employee costs primarily include project management and technology staff costs needed to migrate acquired businesses to Evolent’s integrated technology platform and costs related to the consolidation of brands, internal operations, strategies, processes and platforms. Dedicated employee costs are limited to employees that will have no role in ongoing operations and have no planned role at Evolent once the repositioning activities are completed. Professional services costs primarily relate to services provided by a third-party vendor to review our operating model and organizational design in order to improve our profitability, create value through our solutions and invest in strategic opportunities in future periods.

The Company anticipates total repositioning charges of approximately $25.3 million which will be recorded in selling, general and administrative expenses on the consolidated statement of operations. The repositioning program is anticipated to be substantially complete by the first half of 2024.

The following table provides a summary of our total costs associated with the Repositioning Plan for the three and six months ended June 30, 2023, by major type of cost (in thousands):


	Incurred				Total Amount Expected to be Incurred in the Repositioning Plan
	For the Three Months Ended June 30, 2023		For the Six Months Ended June 30, 2023
Severance and termination benefits	$	4,737	$	4,737	$	7,300
Dedicated employee costs	1,737		1,737		7,725
Professional services	4,787		4,787		10,300
Total	$	11,261	$	11,261	$	25,325