Severance and Other Exit Costs

In connection with acquisitions, the Company may evaluate its data center, sales and marketing, support and engineering operations and the general and administrative function in an effort to eliminate redundant costs. As a result, the Company may incur charges for employee severance, exiting facilities and restructuring data center commitments and other related costs.

2014 Restructuring Plan

During the year ended December 31, 2014, the Company implemented plans to further integrate and consolidate its data center, support and engineering operations, resulting in severance and facility exit costs (the “2014 Restructuring Plan”). The severance charges were associated with eliminating approximately 90 positions across primarily support, engineering operations and sales and marketing. The Company incurred severance costs of $2.3 million in the year ended December 31, 2014 related to these restructuring activities. The employee-related charges associated with these restructurings were completed during the year ended December 31, 2014. As of March 31, 2017, the Company did not have any remaining accrued employee severance related to these severance costs.

The Company had incurred facility costs associated with closing offices in Redwood City, California and Englewood, Colorado. At the time of closing these offices, the Company had remaining lease obligations of approximately $3.0 million for these vacated facilities through March 31, 2018. The Company recorded a facilities charge for these future lease payments, less expected sublease income, of $2.1 million during the year ended December 31, 2014. There were no adjustments related to the 2014 Restructuring Plan during the three months ended March 31, 2017. The Company paid $0.2 million of facility costs related to the 2014 Restructuring Plan and received sublease income of $0.2 million during the three months ended March 31, 2017, and had a remaining accrued facility liability of $0.2 million as of March 31, 2017. The Company expects payments related to the 2014 Restructuring Plan to be completed during the year ended December 31, 2018.

2016 Restructuring Plan

In connection with the Company’s acquisition of Constant Contact on February 9, 2016, the Company implemented a plan to create operational efficiencies and synergies resulting in severance costs and facility exit costs (the “2016 Restructuring Plan”).

The severance charges were associated with eliminating approximately 265 positions across the business. The Company did not incur additional severance costs during the three months ended March 31, 2017. The Company paid $1.0 million of severance costs during the three months ended March 31, 2017 and had a remaining accrued severance liability of $0.5 million as of March 31, 2017.

The Company’s 2016 Restructuring Plan included a plan to close offices in San Francisco, California, Delray Beach, Florida, New York, New York, Miami, Florida, the United Kingdom and Brazil, and a plan to relocate certain employees to our Austin, Texas office. The Company also closed a portion of the Constant Contact offices in Waltham, Massachusetts. During the three months ended March 31, 2017, the Company recorded an adjustment to the Waltham facilities charge for future lease payments of $1.1 million due to a change in estimated sublease income. The Company paid $1.3 million of facility costs related to the 2016 Restructuring Plan during the three months ended March 31, 2017 and had a remaining accrued facility liability of $8.6 million as of March 31, 2017.

The Company incurred all employee-related charges associated with the 2016 Restructuring Plan during the year ended December 31, 2016, and expects severance payments related to the 2016 Restructuring Plan to be completed during the year ended December 31, 2017.

Other than the adjustment mentioned above, the Company completed facility-related charges associated with the 2016 Restructuring Plan during the year ended December 31, 2016, and expects to complete facility exit cost payments related to the plan during the year ended December 31, 2022.

2017 Restructuring Plan

In January 2017, the Company announced plans to close certain offices as part of a plan to consolidate certain web presence customer support operations, resulting in severance costs (the “2017 Restructuring Plan”). These severance charges were associated with eliminating approximately 660 positions, primarily in customer support. Additionally, the Company implemented additional restructuring plans to create operational efficiencies and synergies related to the Constant Contact acquisition, which resulted in additional severance charges for the elimination of approximately 35 individuals. In connection with these plans, the Company incurred severance costs of $4.5 million and paid $0.7 million during the three months ended March 31, 2017. The Company had a remaining accrued severance liability of $3.8 million as of March 31, 2017.

The Company expects to incur severance charges through June 30, 2017 regarding this plan, and expects severance payments related to this plan to be completed during the year ended December 31, 2018.

Activity of Combined Restructuring Plans

The following table provides a summary of the aggregate activity for the three months ended March 31, 2017 related to the Company’s combined Restructuring Plans severance accrual:



	Employee Severance
	(in thousands)
	Web presence segment			Email marketing segment			Total
Balance at December 31, 2016	$	633		$	926		$	1,559
Severance charges	2,345			2,227			4,572
Cash paid	(641		)	(1,193		)	(1,834		)
Balance at March 31, 2017	$	2,337		$	1,960		$	4,297

The following table provides a summary of the aggregate activity for the three months ended March 31, 2017 related to the Company’s combined Restructuring Plans facilities exit accrual:



	Facilities
	(in thousands)
	Web presence segment			Email marketing segment			Total
Balance at December 31, 2016	$	273		$	8,747		$	9,020
Facility adjustments	(10		)	1,065			1,055
Sublease income received	188			—			188
Cash paid	(246		)	(1,251		)	(1,497		)
Balance at March 31, 2017	$	205		$	8,561		$	8,766

The following table presents restructuring charges recorded in the consolidated statements of operations and comprehensive income (loss) for the periods presented:



	For the Three Months Ended March 31,		For the Three Months Ended March 31,
	2016		2017
	(in thousands)
Cost of revenue	$	3,279	$	2,743
Sales and marketing	3,901		1,374
Engineering and development	2,018		652
General and administrative	2,218		858
Total restructuring charges	$	11,416	$	5,627