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Restructuring | 6 Months Ended
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Jan. 28, 2023
Restructuring and Related Activities [Abstract] |
Restructuring | Restructuring We announced a restructuring plan on June 9, 2022, to reduce our future fixed and variable operating costs and allow us to centralize key capabilities, strengthen decision-making to drive efficiencies, and ensure we are allocating resources to our most critical priorities. This restructuring plan reduced our workforce by approximately 15% of salaried positions and represented approximately 4% of our roles in total. In the first quarter of fiscal 2023, we recorded $0.9 million of additional restructuring charges consisting of severance and employee-related benefits. These charges were recorded in selling, general, and administrative expenses on the condensed consolidated statements of operations and comprehensive loss. In furtherance of and as an expansion of this restructuring plan, on January 5, 2023, the Company implemented a plan of termination (“January 2023 Reduction in Force”) that included the elimination of approximately 6% of the Company’s then-current employee workforce, including approximately 20% of employees in salaried positions. In connection with the Company’s January 2023 Reduction in Force, the Company’s Chief Executive Officer agreed that she would step down from her employment with the Company and from the Board of Directors, effective January 5, 2023. This plan also included the closure of our Salt Lake City fulfillment center. In the second quarter of fiscal 2023, we recorded $34.6 million of restructuring charges associated with this plan, $15.6 million of which will be paid in cash and relates to severance and employee-related benefits. We expect substantially all of these cash payments to be completed by the end of the quarter ending April 29, 2023. In connection with this plan, we also recorded $16.9 million of impairment related to a portion of our corporate office space due to a change in the use of this space, and further deterioration in the San Francisco sublease market. This charge was allocated between operating lease right-of-use assets and property and equipment, net on the condensed consolidated balance sheets to record the corresponding assets at their estimated fair market value, with the expense being recorded within selling, general, and administrative expenses on the condensed consolidated statements of operations and comprehensive loss. The estimated fair value of the right-of-use asset and the property and equipment, net was determined using level 3 inputs and based on an income approach using discounted future cash flows. Due to the closure of our Salt Lake City fulfillment center, we recorded $1.8 million of accelerated depreciation expense on assets that will not be transferred to other fulfillment centers in our network and which we do not have immediate plans to use. The January 2023 Reduction in Force reduced stock-based compensation expense by $4.4 million for the three months ended January 28, 2023. This impact is not included in restructuring charges. The components of the restructuring charges are as follows:
|  | For the Three Months Ended |  | For the Six Months Ended
(in thousands) |  | January 28, 2023 |  | January 28, 2023
Severance and employee-related benefits |  | $ | 15,571 |  |  | $ | 16,498 |
Asset impairments |  | 16,874 |  |  | 16,874 |
Accelerated depreciation |  | 1,755 |  |  | 1,755 |
Other |  | 367 |  |  | 367 |
Total restructuring(1) |  | $ | 34,567 |  |  | $ | 35,494 |
(1) Recognized in selling, general, and administrative expenses. The following table provides the components of and changes in the Company’s restructuring and related charges, included in accounts payable and accrued liabilities on the condensed consolidated balance sheets:
(in thousands) |  | Severance and Employee Related Benefits and Other |  |  |  |
Balance at July 30, 2022 |  | $ | 290 |  |  |  |  |
Charges incurred |  | 16,633 |  |  |  |  |
Cash payments |  | (2,434) |  |  |  |  |
Balance at January 28, 2023 |  | $ | 14,489 |  |  |  |  |

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -URI https://asc.fasb.org/extlink&oid=115931487&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI https://asc.fasb.org/topic&trid=2175745 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b)(2) -URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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