Restructuring

On September 15, 2014, the Board of Directors of the Company approved a management simplification restructuring plan (“Plan”) that was subsequently communicated to Kelly personnel in October 2014. The Plan was completed during the fourth quarter of 2014.

We began 2014 with a firm commitment to growth and a clear plan for accelerating Kelly’s strategic priorities through significant investments in our PT specialties, our OCG practices and our centralized approach to servicing large customers. We have executed these investments on schedule, and the Plan now brings additional efficiency to our operating models across the organization by:


•	In the Americas segment, we have:


◦	Streamlined our local U.S. field operations through the closure or consolidation of 52 branches.


◦	Simplified our centralized large account delivery structure.


◦	Flattened our U.S. management structure.


•	In OCG, we have aligned resources more efficiently against areas that deliver rapid growth and return on investment.


•	We downsized our headquarters operations.

Headcount reduction related to the above actions totaled 112 permanent positions across our global workforce, including several senior leadership positions that were vacated at the end of December 2014. The headcount reduction related to the Americas segment was 40 positions recognized as contract termination costs, OCG headcount was reduced by 8 positions, also recognized as contract termination costs, and corporate headquarters was reduced by 64 positions, 53 of which were recognized as a one-time benefit and 11 of which were recognized as contract termination costs. These costs were recorded entirely in corporate SG&A expenses.

In addition to the Plan, in 2014, restructuring costs were incurred related primarily to exiting the staffing business in Sweden, exiting branches in Australia and consolidating back office functions in Australia and New Zealand. These were contract termination costs which were recorded in the EMEA and APAC regions in the segment footnote.

Restructuring costs incurred in 2014 totaled $12.0 million as detailed below.



	Severance Costs		Lease Termination Costs		Total
	(In millions of dollars)
Americas	$	1.7	$	2.3	$	4.0
OCG	1.3		—		1.3
Headquarters	4.6		—		4.6
Plan total	7.6		2.3		9.9
EMEA and APAC restructuring	0.9		1.2		2.1

Total restructuring	$	8.5	$	3.5	$	12.0

A summary of our global restructuring balance sheet accrual, primarily included in accrued payroll and related taxes, is detailed below (in millions of dollars). Restructuring activities in 2013 and the related year-end accrual were immaterial.



Balance as of year-end 2013	$	—

Additions charged to corporate under the Plan	9.9
Additions charged to EMEA and APAC operations	2.1
Reductions for cash payments related to all restructuring activities	(5.1		)

Balance as of year-end 2014	$	6.9

The remaining balance of $6.9 million as of year-end 2014 represents primarily severance costs and the majority is expected to be paid in 2015. No additional charges are expected to be incurred related to the Plan or to activities in Sweden, Australia and New Zealand.