RESTRUCTURING AND INTEGRATION EXPENSE

12 Months Ended

Dec. 31, 2022

Restructuring and Related Activities [Abstract]

Restructuring and integration expense consists of costs related to the consolidation and migration of certain applications and processes, including our financial and sales management systems. It also includes costs related to the integration of acquired businesses into our systems and processes. These costs primarily consist of information technology consulting, project management services and internal labor, as well as other costs associated with our initiatives, such as training, travel, relocation and costs associated with facility closures. In addition, we recorded employee severance costs related to these initiatives, as well as our ongoing cost reduction initiatives across functional areas. We are currently pursuing several initiatives designed to focus on our growth strategy and to increase our efficiency. Restructuring and integration expense is not allocated to our reportable business segments.

Restructuring and integration expense is reflected on the consolidated statements of income as follows for the years ended December 31:


(in thousands)	2022		2021		2020
Total cost of revenue	$	607	$	4,197	$	3,465
Operating expenses	62,529		54,750		75,874
Restructuring and integration expense	$	63,136	$	58,947	$	79,339

Restructuring and integration expense was comprised of the following for the years ended December 31:


(in thousands)	2022		2021		2020
External consulting fees	$	32,067	$	26,676	$	44,096
Employee severance benefits	12,829		9,076		17,628
Internal labor	7,989		7,948		7,568
Other	10,251		15,247		10,047
Restructuring and integration expense	$	63,136	$	58,947	$	79,339

Our restructuring and integration accruals are included in accrued liabilities on the consolidated balance sheets and represent expected cash payments required to satisfy the remaining severance obligations to those employees already terminated and those expected to be terminated under our various initiatives. The majority of the employee reductions, as well as the related severance payments, are expected to be completed by mid-2023, utilizing cash from operations.

Changes in our restructuring and integration accruals were as follows:


(in thousands)	Employee severance benefits
Balance, December 31, 2019	$	3,459
Charges	19,025
Reversals	(1,397)
Payments	(14,289)
Balance, December 31, 2020	6,798
Charges	10,897
Reversals	(1,821)
Payments	(10,202)
Balance, December 31, 2021	5,672
Charges	13,782
Reversals	(953)
Payments	(9,973)
Balance, December 31, 2022	$	8,528

The charges and reversals presented in the rollforward of our restructuring and integration accruals do not include items charged directly to expense as incurred, as those items are not reflected in accrued liabilities on the consolidated balance sheets.