Employee Termination, Asset Impairment and Other Charges

9 Months Ended

Apr. 03, 2020

Postemployment Benefits [Abstract]

Employee Termination, Asset Impairment and Other Charges

Employee Termination, Asset Impairment and Other Charges

The Company recorded the following charges related to employee termination benefits, asset impairment, and other charges:

	Three Months Ended				Nine Months Ended
	April 3, 2020		March 29, 2019		April 3, 2020		March 29, 2019
	(in millions)
Employee termination and other charges:
Closure of Foreign Manufacturing Facilities	$	1	$	5	$	5	$	16
Business Realignment	7		71		37		126
Total employee termination and other charges	8		76		42		142
Gain on disposition of assets:
Business Realignment	—		—		(17)		—
Total gain on disposition of assets	—		—		(17)		—
Total employee termination, asset impairment, and other charges	$	8	$	76	$	25	$	142

Closure of Foreign Manufacturing Facilities

In July 2018, the Company announced the closing of its HDD manufacturing facility in Kuala Lumpur, Malaysia, in order to reduce its manufacturing costs and consolidate HDD operations into Thailand. The Company substantially completed the closure in fiscal year 2019.

The following table presents an analysis of the components of the restructuring charges, payments and adjustments made against the reserve during the nine months ended April 3, 2020:

	Employee Termination Benefits		Contract Termination and Other		Total
	(in millions)
Accrual balance at June 28, 2019	$	30	$	2	$	32
Charges	3		2		5
Cash payments	(26)		(4)		(30)
Accrual balance at April 3, 2020	$	7	$	—	$	7

Business Realignment

The Company periodically incurs charges as part of the integration process of recent acquisitions and to realign its operations with anticipated market demand, primarily consisting of organization rationalization designed to streamline its business, reduce its cost structure and focus its resources. In addition to the amounts recognized under Business Realignment as presented above, the Company recognized $5 million of accelerated depreciation on facility assets in Cost of revenue and Operating expenses in the Condensed Consolidated Statements of Operations for the nine months ended April 3, 2020.

The following table presents an analysis of the components of the activity against the reserve during the nine months ended April 3, 2020:

	Employee Termination Benefits		Contract Termination and Other		Total
	(in millions)
Accrual balance at June 28, 2019	$	37	$	8	$	45
Charges	16		4		20
Cash payments	(39)		(12)		(51)
Accrual balance at April 3, 2020	$	14	$	—	$	14