RESTRUCTURING AND RELATED CHARGES

6 Months Ended

Jun. 30, 2023

Restructuring and Related Activities [Abstract]

In August 2022 and April 2020, we initiated Board-approved restructuring plans. Costs incurred related to the restructuring plans are classified as Restructuring and related charges on the Condensed Consolidated Statements of Operations. The restructuring activities are summarized by plan in the sections below.

2022 Restructuring Plan

In August 2022, we initiated a multi-phase cost savings plan designed to reduce our expense structure to align with our go-forward business and financial objectives (the “2022 Cost Savings Plan”). The 2022 Cost Savings Plan included a restructuring plan, approved by our Board on August 5, 2022 (the “2022 Restructuring Plan”). The first phase and second phase of the 2022 Restructuring Plan are expected to include an overall reduction of approximately 1,000 positions globally, with the majority of these reductions completed as of March 31, 2023 and the remainder expected to occur by the end of 2023. In connection with first and second phase actions, we expect to record total pre-tax charges of $20.0 million to $27.0 million. A majority of the pre-tax charges are expected to be paid in cash and relate to employee severance and compensation benefits, with an immaterial amount of charges related to other exit costs. We have incurred total pretax charges of $19.1 million since the inception of the 2022 Restructuring Plan.

The following table summarizes costs incurred by segment related to the 2022 Restructuring Plan for the three and six months ended June 30, 2023 (in thousands):


	Three Months Ended June 30, 2023
	Employee Severance and Benefit Costs (Credits) (1)		Other Exit Costs		Total Restructuring Charges (Credits)
North America	$	126	$	229	$	355
International	158		—		158
Consolidated	$	284	$	229	$	513

(1)The employee severance and benefits costs for the three months ended June 30, 2023 are related to the termination of approximately 39 employees.


	Six Months Ended June 30, 2023
	Employee Severance and Benefit Costs (Credits) (1)		Other Exit Costs		Total Restructuring Charges (Credits)
North America	$	4,566	$	1,037	$	5,603
International	3,891		—		3,891
Consolidated	$	8,457	$	1,037	$	9,494

(1)The employee severance and benefits costs for the six months ended June 30, 2023 are related to the termination of approximately 371 employees.

The following table summarizes restructuring liability activity for the 2022 Restructuring Plan (in thousands):


	Employee Severance and Benefit Costs		Other Exit Costs		Total
Balance as of December 31, 2022	$	175	$	—	$	175
Charges payable in cash	8,457		1,037		9,494
Cash payments	(8,108)		(730)		(8,838)
Foreign currency translation	73		—		73
Balance as of June 30, 2023 (1)	$	597	$	307	$	904

(1)Substantially all of the remaining cash payments for the first and second phase of the 2022 Restructuring Plan costs are expected to be disbursed by the end of 2023.

In July 2023, the Board approved the third phase of the 2022 Restructuring Plan, which is expected to include reductions in positions globally. In connection with the third phase, we expect to record total pre-tax charges of approximately $3.6 million. A majority of the pre-tax charges for the third phase are expected to be paid in cash and primarily related to employee severance and compensation benefits, with an immaterial amount of charges related to other exit costs.

2020 Restructuring Plan

In April 2020, the Board approved a multi-phase restructuring plan related to our previously-announced strategic shift and as part of the cost cutting measures implemented in response to the impact of COVID-19 on our business (the "2020 Restructuring Plan"). We have incurred total pretax charges of $108.0 million since the inception of the 2020 Restructuring Plan. Our actions under this plan were substantially completed by December 31, 2021, and our current and future charges or credits will be from changes in estimates. Our 2020 Restructuring Plan included workforce reductions of approximately 1,600 positions globally, the exit or discontinuation of the use of certain leases and other assets, impairments of our right-of-use and other long-lived assets, and the exit of our operations in New Zealand and Japan.

The following tables summarize costs incurred by segment related to the 2020 Restructuring Plan for the three and six months ended June 30, 2023 and 2022 (in thousands):


	Three Months Ended June 30, 2023
	Employee Severance and Benefit Costs (Credits)		Legal and Advisory Costs		Lease-related Charges (Credits)		Total Restructuring Charges (Credits)
North America	$	—	$	1	$	(63)	$	(62)
International	(1,436)		8		288		(1,140)
Consolidated	$	(1,436)	$	9	$	225	$	(1,202)


	Three Months Ended June 30, 2022
	Employee Severance and Benefit Costs (Credits)		Legal and Advisory Costs		Lease-related Charges (Credits)		Total Restructuring Charges (Credits)
North America	$	—	$	86	$	818	$	904
International	473		24		1,538		2,035
Consolidated	$	473	$	110	$	2,356	$	2,939


	Six Months Ended June 30, 2023
	Employee Severance and Benefit Costs (Credits)		Legal and Advisory Costs		Lease-related Charges (Credits)		Total Restructuring Charges (Credits)
North America	$	—	$	2	$	544	$	546
International	(2,482)		(48)		595		(1,935)
Consolidated	$	(2,482)	$	(46)	$	1,139	$	(1,389)


	Six Months Ended June 30, 2022
	Employee Severance and Benefit Costs (Credits)		Legal and Advisory Costs		Lease-related Charges (Credits)		Total Restructuring Charges (Credits)
North America	$	1	$	130	$	1,174	$	1,305
International	184		61		1,701		1,946
Consolidated	$	185	$	191	$	2,875	$	3,251

As a part of our 2020 Restructuring Plan, we terminated or modified several of our leases. In other cases we vacated our leased facilities, and some of those facilities are being actively marketed for sublease or we are in negotiations with the landlord to potentially terminate or modify those leases. We recognized $1.2 million in impairment related to those leases during the three and six months ended June 30, 2022. See Note 2, Goodwill and Long-Lived Assets, for additional information. In January 2023, we exercised our option to early terminate our lease at 600 West Chicago, now expiring on January 31, 2024, which required us to pay a penalty of $9.6 million with our early termination notice. Prior to exercising our option to early terminate, the expiration of 600 West Chicago was January 31, 2026. Rent expense, including amortization of the right-of-use asset and accretion of the operating lease liability, sublease income, termination and modification gains and losses, and other variable lease costs related to the leased facilities vacated as part of our restructuring plan are presented within Restructuring and related charges in the Condensed Consolidated Statements of Operations. The current and

non-current liabilities associated with these leases continue to be presented within Accrued expenses and other current liabilities and Operating lease obligations in the Condensed Consolidated Balance Sheets.

The following table summarizes restructuring liability activity for the 2020 Restructuring Plan (in thousands):


	Employee Severance and Benefit Costs		Other Exit Costs		Total
Balance as of December 31, 2022	$	4,306	$	301	$	4,607
Charges payable in cash and changes in estimate (1)	(2,482)		(46)		(2,528)
Cash payments	(709)		(113)		(822)
Foreign currency translation	33		2		35
Balance as of June 30, 2023 (2)	$	1,148	$	144	$	1,292

(1)The credit recorded during the three and six months ended June 30, 2023 primarily relates to the release of our estimated accrual for certain severance benefits upon expiration of the eligible payout period.

(2)Substantially all of the remaining cash payments for the 2020 Restructuring Plan costs are expected to be disbursed by the end of 2023.