Restructuring and Transformation Activities

9 Months Ended

Sep. 29, 2024

Restructuring and Related Activities [Abstract]

Restructuring and Transformation Activities

6. Restructuring and Transformation Activities

2024 Actions

The Company had no restructuring or transformation charges during the third quarter of 2024. Restructuring and transformation charges for the nine months ended September 29, 2024 were $6.4 million as a continuation of the actions that were announced in the second quarter of 2023 as part of the comprehensive transformation initiative. The transformation activities consisted of $3.3 million of severance charges and $3.1 million of costs to execute the transformation. The severance and transformation costs are recorded in selling, general and administrative ("SG&A") expenses in the consolidated statements of earnings.

Additionally, in the second quarter of 2024, the Company recognized an impairment charge of $5.5 million for certain right-of-use assets related to our leased headquarters facility reflecting adjustments as to how we are utilizing the building as a part of our ongoing transformation efforts. The impairment charge related to the right-of-use assets was recorded in the asset impairment charge in the consolidated statements of earnings.

The restructuring and transformation costs included in SG&A are detailed below for September year-to-date 2024 (in millions of dollars):


	September Year-to-Date 2024
		Severance Costs		Transformation Costs		Total

Professional & Industrial		$	0.4	$	—	$	0.4
Science, Engineering & Technology		0.3		—		0.3

Outsourcing & Consulting		0.5		—		0.5
Corporate		2.1		3.1		5.2
Total		$	3.3	$	3.1	$	6.4

2023 Actions

In the first quarter of 2023, the Company undertook restructuring actions to further our cost management efforts in response to the demand levels and to reflect a repositioning of our P&I staffing business to better capitalize on opportunities in local markets. Restructuring costs incurred in the first quarter of 2023 totaled $6.6 million and were recorded entirely in SG&A expenses in the consolidated statements of earnings.

In the second quarter of 2023, the Company announced a comprehensive transformation initiative that included actions to further streamline the Company's operating model to enhance organizational efficiency and effectiveness. The total costs incurred related to these transformation activities in the second quarter of 2023 totaled $8.0 million. The transformation activities included $4.5 million of costs to execute the transformation initiatives through the use of an external consultant, a $2.4 million impairment charge for right-of-use assets related to an unoccupied office space lease and additional severance of $1.1 million, net of adjustments. The impairment charge related to the right-of-use assets was recorded in the asset impairment charge in the consolidated statements of earnings. The costs to execute and severance were included in the $5.6 million of restructuring costs incurred in the second quarter of 2023, net of prior period adjustments, and were recorded in SG&A expenses in the consolidated statements of earnings, as detailed further below.

In the third quarter of 2023, the Company incurred $15.4 million of restructuring charges and transformation fees as a continuation of the actions that were announced in the second quarter of 2023 as part of the comprehensive transformation initiative. The third quarter transformation activities included $10.4 million of additional severance, $4.5 million of costs to execute the transformation through the use of an external consultant, and $0.5 million of lease termination costs. The severance, costs to execute, and lease termination costs were recorded in SG&A expenses in the consolidated statements of earnings.

The restructuring and transformation costs included in SG&A are detailed below for the third quarter and September year-to-date 2023 (in millions of dollars):



	Third Quarter 2023						September Year-to-Date 2023
	Severance Costs		Lease Termination Costs, Transformation and Other		Total		Severance Costs		Lease Termination Costs, Transformation and Other		Total

Professional & Industrial	$	3.6	$	0.4	$	4.0	$	6.6	$	0.7	$	7.3
Science, Engineering & Technology	0.6		0.1		0.7		1.0		0.2		1.2
Education	0.6		—		0.6		1.0		—		1.0
Outsourcing & Consulting	1.8		—		1.8		2.3		—		2.3
International	—		—		—		0.6		—		0.6
Corporate	3.8		4.5		8.3		4.6		10.6		15.2
Total	$	10.4	$	5.0	$	15.4	$	16.1	$	11.5	$	27.6

Accrual Summary

A summary of the global restructuring balance sheet accrual, included in accrued payroll and related taxes and accounts payable and accrued liabilities in the consolidated balance sheet, is detailed below (in millions of dollars):


Balance as of year-end 2023	$	15.1
Accruals	2.3






Reductions for cash payments	(11.0)
Disposition of EMEA staffing operations	(1.5)
Accrual adjustments	(0.2)
Balance as of first quarter-end 2024	4.7
Accruals	4.3
Reductions for cash payments	(4.4)

Balance as of second quarter-end 2024	4.6




Reductions for cash payments	(2.0)
Accrual adjustments	(0.2)
Balance as of third quarter-end 2024	$	2.4

The remaining balance of $2.4 million as of third quarter-end 2024 primarily represents the costs to execute the transformation initiatives and severance costs, and the majority is expected to be paid by the end of 2024. No material adjustments are expected to be recorded.