XML 35 R20.htm IDEA: XBRL DOCUMENT v3.20.2
Restructuring Activities
12 Months Ended
May 30, 2020
Restructuring Activities [Abstract]  
Restructuring Activities

12.  Restructuring Activities



On February 27, 2020, the Company’s management and board of directors committed to a global restructuring and business transformation plan (the “Plan”) centered on strengthening the business for greater agility and resilience in anticipation of macroeconomic volatility. The Plan consists of two key components: an effort to streamline the management structure and eliminate non-essential positions to focus on core solution offerings, improve efficiency and enhance the employee experience; and a strategic rationalization of the Company’s physical geographic footprint and real estate spend to focus investment dollars in high growth core markets for greater impact.



As part of the Plan, the Company completed a reduction in force (the “RIF”) in early March in North America and Asia Pacific whereby it eliminated 73 positions. In connection with the RIF, the Company incurred $3.9 million of employee termination costs in the fourth quarter of fiscal 2020, of which $2.0 million was paid at the end of fiscal 2020. An additional $1.7 million is expected to be paid in fiscal 2021. The majority of employees impacted by the RIF exited the Company before the end of fiscal 2020, with the remainder expected to exit in the first half of fiscal 2021. The Company expects to incur and pay an additional $1.4 million of employee termination costs in fiscal 2021.



The real estate component of the Plan is specifically targeted to shrink the Company’s real estate footprint by 26% globally through either lease termination or subleasing. The Company exited from a number of leases during the fourth quarter resulting in $1.1 million of non-cash charges relating to lease terminations and other costs associated with exiting the facilities, of which $0.6 million was related to impairment of operating right-of-use assets and $0.5 million was related to loss on disposal of fixed assets. The Company currently expects to incur additional restructuring charges in fiscal 2021 as it continues to exit certain real estate leases in accordance with the Plan. The exact amount and timing will depend on a number of variables, including market conditions. Given the current macro environment, particularly the current shift away from commercial real estate occupancy, accelerated by the Pandemic, management believes it could take longer and be more costly to terminate and sublet the Company’s leases, therefore taking longer to realize the expected savings.



All of the employee termination costs and the facility exit costs associated with the Company’s restructuring initiatives are recorded in selling, general and administrative expenses in the Company’s Consolidated Statement of Operations for the year ended May 30, 2020. At May 30, 2020, unpaid employee termination benefits were included in accounts payable and accrued expenses in the Company’s Consolidated Balance Sheet. During the first quarter of fiscal 2021, the Company started the strategic business review in Europe, and currently expects to substantially complete the review and restructuring in Europe in fiscal 2021.