Restructuring and Related Charges |
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| Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring and Related Charges | Restructuring and Related Charges Global Restructuring Plan
In the first quarter of 2023, the Company began a global restructuring plan intended to improve the Company’s cost structure, operating efficiency, and profitability as part of its ongoing margin improvement initiatives. The plan involves reduction in force, offshoring certain functions, and other measures designed to reduce costs to achieve the Company’s long term margin goals. The plan was approved and initiated in the first quarter of 2023 and is expected to continue throughout 2023 and early 2024.
During the three months ended March 31, 2023, the Company recognized restructuring charges of $5.9 million, primarily for employee severance and benefits in connection with the workforce reduction and accelerated expense on abandoned right-of-use assets. In addition, the Company incurred professional service fees of $4.0 million for consulting costs related to the execution of the Company’s global restructuring plan. All charges were recorded as selling, general and administrative expenses and cost of services (exclusive of depreciation and amortization) in the condensed consolidated statements of operations.
The Company expects to recognize additional restructuring charges in 2023 and early 2024 of approximately $15.0 million to $20.0 million, primarily for severance and benefits, professional service fees, and transition costs. The Company is continuing to evaluate operating costs and outsourcing opportunities and the expected charges related to our global restructuring plan may be greater than expected, including charges for additional severance and professional service fees.
The components of the restructuring charges (including professional service fees) are as follows:
(1)Charges of $1.7 million recorded in cost of services (exclusive of depreciation and amortization) and charges of $2.7 million recorded in selling, general and administrative expenses.
(2)Charges for accelerated expense on abandoned right-of-use assets recorded in selling, general and administrative expenses.
(3)Professional service fees consist of consulting costs related to the execution of the Company’s global restructuring plan to improve the Company’s cost structure, operating efficiency, and redesign and right size the organization. These charges are recorded 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 accrued salaries and payroll and accrued expenses and other current liabilities on the condensed consolidated balance sheets:
(1)Includes $4.4 million in charges for employee severance and benefits related to the workforce reduction, all of which remains unpaid as of March 31, 2023.
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