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 through the first half of 2024.
During the year ended December 31, 2023, the Company recognized restructuring charges of $18.3 million, primarily for employee severance and benefits in connection with the workforce reduction, accelerated expense on abandoned right-of-use assets, and other restructuring charges. In addition, the Company incurred professional service fees of $9.7 million during the year ended December 31, 2023 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 consolidated statements of operations.
The Company expects to recognize additional restructuring charges through the first half of 2024 of $2.0 million to $3.0 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 the 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 $4.3 million recorded in cost of services (exclusive of depreciation and amortization) for the year ended December 31, 2023. Charges of $9.4 million recorded in selling, general and administrative expenses for the year ended December 31, 2023.
(2)Charges for accelerated expense and additional costs associated with 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.
(4)Other charges 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 consolidated balance sheets:
(1)Includes $13.7 million in charges for employee severance and benefits related to the workforce reduction, $1.3 million of which remains unpaid as of December 31, 2023.
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