Costs Associated with Exit or Disposal Activities

3 Months Ended

Mar. 31, 2019

Restructuring And Related Activities [Abstract]

Costs Associated with Exit or Disposal Activities

Note 4. Costs Associated with Exit or Disposal Activities

During the first quarter of 2019, the Company initiated a restructuring plan to simplify and refine its operating model in the U.S. (the “Americas 2019 Exit Plan”), in part to improve agent attrition and absenteeism. The Americas 2019 Exit Plan includes, but is not limited to, closing customer contact management centers, consolidating leased space in various locations in the U.S. and management reorganization. The Company anticipates finalizing these actions by December 31, 2019.

During the second quarter of 2018, the Company initiated a restructuring plan to manage and optimize capacity utilization, which included closing customer contact management centers and consolidating leased space in various locations in the U.S. and Canada (the “Americas 2018 Exit Plan”). The Company finalized the remainder of the site closures under the Americas 2018 Exit Plan as of December 2018, resulting in a reduction of 5,000 seats.

The Company’s actions under both the Americas 2018 and 2019 Exit Plans are anticipated to result in general and administrative cost savings, and lower depreciation expense.

The cumulative costs expected and incurred to date related to cash and non-cash expenditures resulting from the Americas 2018 Exit Plan and the Americas 2019 Exit Plan are outlined below as of March 31, 2019 (in thousands):

	Americas 2018 Exit Plan		Americas 2019 Exit Plan
	Cumulative Costs Incurred To Date		Costs Expected To Be Incurred		Cumulative Costs Incurred To Date		Expected Remaining Costs
Lease obligations and facility exit costs ⁽¹⁾	$	7,073	$	85	$	—	$	85
Severance and related costs ⁽²⁾		3,429		213		7		206
Severance and related costs ⁽¹⁾		1,054		1,744		1,090		654
Non-cash impairment charges		5,875		1,582		1,582		—
Other non-cash charges		—		80		—		80
	$	17,431	$	3,704	$	2,679	$	1,025

(1) Included in “General and administrative” costs.

(2) Included in “Direct salaries and related costs.”

The Company has paid a total of $10.0 million in cash through March 31, 2019, of which $9.9 million related to the Americas 2018 Exit Plan and $0.1 million related to the Americas 2019 Exit Plan.

The following table summarizes the accrued liability and related charges for the three months ended March 31, 2019 (none in 2018) (in thousands):

	Americas 2018 Exit Plan									Americas 2019 Exit Plan
	Lease Obligations and Facility Exit Costs			Severance and Related Costs			Total			Severance and Related Costs
Balance at the beginning of the period	$	1,769		$	817		$	2,586		$	—
Charges included in "Direct salaries and related costs"		—			—			—			7
Charges (reversals) included in "General and administrative"		(4	)		19			15			1,090
Cash payments		(265	)		(341	)		(606	)		(57	)
Balance sheet reclassifications ⁽¹⁾		(1,338	)		—			(1,338	)		—
Balance at the end of the period	$	162		$	495		$	657		$	1,040

(1) Consists of the reclassification from the restructuring liability to “Operating lease liabilities” and “Long-term operating lease liabilities” upon adoption of ASC 842 on January 1, 2019.

Restructuring Liability Classification

The following table summarizes the Company’s short-term and long-term accrued liabilities associated with the Americas 2018 Exit Plan (in thousands):

	Americas 2018 Exit Plan				Americas 2019 Exit Plan
	March 31, 2019		December 31, 2018		March 31, 2019
Lease obligations and facility exit costs:
Included in "Accounts payable"	$	—	$	100	$	—
Included in "Other accrued expenses and current liabilities"		93		952		—
Included in "Other long-term liabilities"		69		717		—
		162		1,769		—
Severance and related costs:
Included in "Accrued employee compensation and benefits"		489		793		1,038
Included in "Other accrued expenses and current liabilities"		6		24		2
		495		817		1,040
	$	657	$	2,586	$	1,040

The long-term accrued restructuring liability relates to variable costs associated with future rent obligations to be paid through the remainder of the lease terms, the last of which ends in June 2021.