Restructuring

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

21. RESTRUCTURING

During the fourth quarter of 2022, the Company initiated a restructuring program designed to optimize the assets and business processes, and information technology systems of the Company in relation to the Business Combination with Adtran Networks. The restructuring program is expected to maximize cost synergies by realizing operation scale, combining sales channels, streamlining corporate and general and administrative functions, including human capital resources and combining sourcing and production costs. This restructuring program is expected to be completed in late 2024.

In February 2019, the Company announced the restructuring of a certain portion of its workforce predominantly in Germany, which included the closure of a subsidiary's office location in Munich, Germany accompanied by relocation or severance benefits for the affected employees. Voluntary early retirement was offered to certain other employees and was announced in March 2019 and again in August 2020. This plan was completed in 2021 and all amounts were paid in 2022.

During the three and nine months ended September 30, 2023, we recognized a certain write down of inventory of $21.0 million due to a restructuring discontinuation of certain product lines within our Network Solutions segment. There was no write down of inventory during the three and nine months ended September 30, 2022. See Note 7, Inventory, for additional information regarding the write down of inventory.

A reconciliation of the beginning and ending restructuring liabilities, which is included in accrued wages and benefits in the Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022, is as follows:


	Three Months Ended			Nine Months Ended
(In thousands)	September 30, 2023			September 30, 2023
Balance at beginning of period	$	6,452		$	159
Plus: Amounts charged to cost and expense		3,830			12,135
Less: Amounts paid		(4,729	)		(6,741	)
Balance as of September 30, 2023	$	5,553		$	5,553


	For the Year Ended
(In thousands)	December 31, 2022
Balance as of December 31, 2021	$	1,514
Plus: Amounts charged to cost and expense		1,629
Less: Amounts paid		(2,984	)
Balance as of December 31, 2022	$	159

Restructuring expenses included in the Condensed Consolidated Statements of Loss are for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(In thousands)	2023			2022		2023			2022

Network Solutions - Cost of revenue	$	611		$	—	$	669		$	—
Network Solutions - Inventory write down		21,043			—		21,043			—
Services & Support - Cost of revenue		(24	)		—		(6	)		—
Cost of revenue	$	21,630		$	—	$	21,706		$	—
Selling, general and administrative expenses		3,387			—		6,960			2
Research and development expenses		(144	)		—		4,512			—
Total restructuring expenses	$	24,873		$	—	$	33,178		$	2

The following table represents the components of restructuring expenses by geographic area for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands)	2023		2022		2023		2022
United States	$	22,598	$	—	$	25,217	$	2
International		2,275		—		7,961		—
Total restructuring expenses	$	24,873	$	—	$	33,178	$	2