Restructuring

3 Months Ended

Mar. 31, 2023

Restructuring and Related Activities [Abstract]

On February 27, 2023, the Board of Directors of the Company approved a restructuring plan (the “Plan”) that is designed to reduce operating costs, drive efficiencies by consolidating development and support talent into regional hubs, and enable investment for potential long-term growth. The actions associated with the Plan are expected to substantially complete by the end of 2023 and we expect to incur total estimated costs of up to $20 million.

The Company primarily incurred employee severance and other termination benefits costs, as well as lease abandonment costs in connection with the Plan. Severance benefits provided to employees were recognized on the communication date in general. Certain severance benefits and retention bonuses are contingent on service until termination date to support the transition of certain roles to different locations, and are recognized ratably over the requisite service period. The Company closed certain offices as part of the Plan and the amortization of the remaining right-of-use assets was accelerated related to the lease abandonment.

The recognition of restructuring related costs requires the Company to make certain judgments and estimates regarding the nature, timing and amount of costs associated with the Plan. To the extent the Company’s actual results differ from its estimates and assumptions, the Company may be required to revise the estimates of future accrued restructuring liabilities. At the end of each reporting period, the Company evaluates the remaining accrued restructuring balances to ensure that the accruals continue to reflect the best estimate in accordance with the execution of the Plan.

The Company incurred costs of approximately $8.8 million in connection with the Plan during the three months ended March 31, 2023, which consists of $7.7 million in costs related to severance, and other employee termination benefits, and $1.1 million primarily related to lease abandonment costs.

A summary of the restructuring related costs for the three months ended March 31, 2023 by activity type is as follows (in thousands):


	Severance and other termination benefits		Lease abandonment and related charges		Total
Cost of net revenue	$	647	$	113	$	760
Product development	4,207		356		4,563
Sales, marketing and support	1,054		278		1,332
General and administrative	1,788		379		2,167
Total	$	7,696	$	1,126	$	8,822

The following table is a summary of the changes in the restructuring related liabilities, included within accrued compensation and benefits and other accrued liabilities on the consolidated balance sheets, associated with the Plan (in thousands):


Balance as of January 1, 2023	$	—
Restructuring related costs accrued	8,822
Cash payment during the period	(2,726)
Non-cash items	(1,126)
Balance as of March 31, 2023	$	4,970