Restructuring and Other Related Costs

12 Months Ended

Dec. 28, 2019

Restructuring and Related Activities [Abstract]

Restructuring and Other Related Costs

Restructuring and Other Related Costs

In December of 2018, the Company implemented a restructuring initiative (the “2018 Restructuring Plan”) as part of a comprehensive review of the Company's operations and ongoing integration activities in order to optimize resources for future growth, improve efficiencies and address redundancies following the Acquisition. As part of the 2018 Restructuring Plan, the Company has made several changes it believes will help its research and development efficiency, with consolidation of its manufacturing and development sites, including closure of its Berlin, Germany site, reduction of headcount at its Munich, Germany site, process changes to leverage the Company's engineering and product line development resources across regions and prioritization of research and development initiatives. As of December 28, 2019, the Berlin and Munich initiatives have been substantially completed, with some remaining payments to be made in 2020. Additional restructuring initiatives may continue as the Company shifts to transformation initiatives.

In connection with the Acquisition, the Company assumed restructuring liabilities associated with Coriant's previous restructuring and reorganization plans consisting of termination benefits primarily comprised of severance payments. These costs are recorded at estimated fair value.

The following table presents restructuring and other related costs included in cost of revenue and operating expenses in the accompanying consolidated statements of operations under the 2018 Restructuring Plan, Coriant's previous restructuring and reorganization plans, and the 2017 Restructuring Plan (in thousands):

	Year Ended
	December 28, 2019
	Cost of Revenue		Operating Expenses
Severance and related expenses	$	26,576	$	25,303
Lease related impairment charges	1,158		14,703
Asset impairment	2,201		7
Others	—		838
Total	$	29,935	$	40,851

	Year Ended
	December 29, 2018
	Cost of Revenue		Operating Expenses
Severance and related expenses	$	2,630	$	10,413
Lease related impairment charges	—		(544		)
Asset impairment	—		2,643
Total	$	2,630	$	12,512

Restructuring liabilities are reported within accrued expenses and other long-term liabilities in the accompanying consolidated balance sheets (in thousands):

	December 29, 2018		Assumed Liabilities from the Acquisition		Charges		Cash			Other and Non-cash Settlements			December 28, 2019
Severance and related expenses	$	19,842	—		51,879		$	(43,136	)	$	(20	)	$	28,565
Lease related impairment charges	4,266		—		15,861		(8,418		)	(11,709		)	—
Asset impairment	243		—		2,208		(243		)	(2,208		)	—
Others	—		—		838		—			—			838
Total	$	24,351	$	—	$	70,786	$	(51,797	)	$	(13,937	)	$	29,403

As of December 28, 2019, the Company's restructuring liability was comprised of $28.6 million of severance and related expenses, of which $7.4 million is related to assumed restructuring liabilities associated with Coriant's previous restructuring and reorganization plans and is expected to be paid by 2022. The remaining $21.2 million is primarily related to the 2018 Restructuring Plan and is expected to be substantially paid by the end of 2020. The Company's restructuring liability as of December 28, 2019 also comprised of $0.8 million related to service agreements that were determined to have no future use. The Company expects the payments related to the service agreements to be fully paid by the second quarter of 2021. Other and Non-cash settlements primarily include foreign exchange impact on settlement of restructuring liability and impairment of right of use asset.