Restructuring Charges

12 Months Ended

Dec. 31, 2021

Restructuring and Related Activities [Abstract]

Restructuring Charges

Restructuring Charges

2021

In 2021, we incurred $12.4 million of total pretax restructuring expense. Of the $12.4 million pretax restructuring expense, $8.5 million related to the divestiture of our Life Sciences business, a reporting unit within the Business Advisory segment. On November 1, 2021, we completed the sale of the Life Sciences business to a third-party, and recognized a $31.5 million pre-tax gain which is included within other income (expense), net on our consolidated statement of operations. For the ten months ended October 31, 2021, the Life Sciences business generated $16.7 million of revenue and is not considered significant to our consolidated financial statements.

The total pretax restructuring expense of $12.4 million recognized in 2021 consisted of the following charges:

Employee Costs - We incurred $8.1 million of employee-related restructuring expense, of which $6.8 million related to transaction-related employee payments made in connection with the divestiture of our Life Sciences businesses and $1.3 million related to other employee-related expenses in our Business Advisory segment.

Office space reductions - We incurred $3.1 million of restructuring expense related to office space reductions, of which $2.3 million related to rent and related expenses, net of sublease income, and accelerated depreciation on furniture and fixtures for previously vacated office spaces and $0.8 million related to accelerated amortization and depreciation on the operating lease ROU asset and fixed assets related to our London, U.K. office which we vacated in connection with the divestiture of our Life Sciences business.

Other - We incurred $1.2 million of other restructuring charges, of which $0.9 million related to third-party legal and professional advisory fees incurred in connection with the divestiture of our Life Sciences business and $0.2 million related to third-party advisory fees related to the reorganization of our internal operating and financial reporting structure. See Note 19 "Segment Information" for more information on our reorganization which is effective in the first quarter of 2022.

Of the total $12.4 million pretax restructuring charge, $7.9 million was recognized in the results of operations of our Business Advisory segment and $4.5 million was recognized in our corporate operations.

2020

In 2020, we incurred $20.5 million of total pretax restructuring expense. Of the $20.5 million pretax restructuring expense, $18.7 million related to the restructuring plan executed in the fourth quarter of 2020 to reduce operating costs to address the impact of the COVID-19 pandemic on our business. The total pretax restructuring expense of $20.5 million recognized in 2020 consisted of the following charges:

Employee Costs - We incurred $5.3 million of severance-related restructuring expense, of which, $4.8 million related to the fourth quarter 2020 restructuring plan and $0.4 million related to workforce reductions completed prior to the fourth quarter of 2020 to better align resources with market demand. Of the total $5.3 million of severance-related restructuring expense, $2.0 million related to our Education segment, $1.5 million related to our Healthcare segment, $1.0 million related to our Business Advisory segment, and $0.8 million related to our corporate operations.

Office space reductions - We incurred $14.0 million of restructuring expense related to office space reductions, which primarily related to the fourth quarter 2020 restructuring plan. The fourth quarter 2020 restructuring plan provided for a reduction in certain leased office spaces which included a portion of our principal executive office in Chicago, Illinois; the remaining portion of our Lake Oswego, Oregon office; our Boston, Massachusetts and Detroit, Michigan offices; and portions of our Denver, Colorado, New York City, New York, and Pensacola, Florida offices. As a result, we recognized $13.2 million of non-cash lease impairment charges on the related operating lease ROU assets and fixed assets for those we intend to sublease, as well as $0.7 million of accelerated amortization and depreciation on the related operating lease ROU assets and fixed assets we abandoned. See Note 5 “Leases” for additional information on the long-lived asset impairment test performed in 2020. We also incurred $0.1 million related to rent and related expenses, net of sublease income, for previously vacated office spaces.

Other - We incurred $1.2 million of other restructuring charges primarily related to an accrual for the termination of a third-party advisor agreement in our Business Advisory segment.

Of the total $20.5 million pretax restructuring charge, $14.8 million related to our corporate operations, $2.2 million related to our Business Advisory segment, $2.0 million related to our Education segment, and $1.5 million related to our Healthcare segment.

2019

In 2019, we incurred $1.9 million of pretax restructuring expense. This expense primarily consisted of the following charges:

Employee Costs - We incurred $0.6 million of severance expense as a result of workforce reductions to better align resources with market demand and workforce reductions in our corporate operations.

Office space reductions - We incurred $1.2 million of restructuring expense related to office space reductions. During 2019, we exited a portion of our Lake Oswego, Oregon office resulting in a $0.7 million lease impairment charge on the related operating lease ROU asset and leasehold improvements and $0.2 million of accelerated depreciation on furniture and fixtures in that office. See Note 5 “Leases” for additional information on the long-lived asset impairment test performed in 2019. Additionally, during 2019, we exited the remaining portion of our Middleton, Wisconsin office and an office in Houston, Texas, resulting in restructuring charges of $0.4 million and $0.1 million, respectively, which primarily consisted of accelerated depreciation on furniture and fixtures in those offices. During the fourth quarter of 2019, we entered into an amendment to the lease of our principal executive office in Chicago, Illinois. Among other items, the amendment terminated the lease with respect to certain leased space which we previously vacated and subleased to a third-party. As a result of the amendment, we recognized a restructuring gain of $0.4 million. See Note 5 “Leases” for additional information on the amendment.

Of the $1.9 million pretax restructuring charge, $1.5 million related to our corporate operations, $0.3 million related to our Healthcare segment, and $0.1 million related to our Business Advisory segment.

The table below sets forth the changes in the carrying amount of our restructuring charge liability by restructuring type for the years ended December 31, 2021 and 2020.

	Employee Costs		Office Space Reductions		Other		Total
Balance as of December 31, 2019	$	68	$	91	$	—	$	159
Additions (1) (2)	5,290		—		1,256		6,546
Payments	(2,907)		—		(363)		(3,270)
Adjustments (1) (2)	(4)		(7)		—		(11)
Balance as of December 31, 2020	2,447		84		893		3,424
Additions (1)(2)	8,132		—		1,156		9,288
Payments	(9,993)		(84)		(1,482)		(11,559)
Adjustments (1)(2)	(13)		—		—		(13)
Balance as of December 31, 2021	$	573	$	—	$	567	$	1,140

(1)Additions and adjustments for the years ended December 31, 2021 and 2020 include restructuring charges of $0.1 million and $0.2 million, respectively, related to office space reductions directly related to discontinued operations.

(2)Additions and adjustments exclude non-cash items related to vacated office spaces, such as lease impairment charges and accelerated depreciation on abandoned operating lease ROU assets and fixed assets, which are recorded as restructuring charges on our consolidated statements of operations.

All of the $0.6 million restructuring charge liability related to employee costs at December 31, 2021 is expected to be paid in the next 12 months and is included as a component of accrued payroll and related benefits. Substantially all of the $0.6 million other restructuring charge liability at December 31, 2021 is expected to be paid in the next 12 months and is included as a component of accrued expenses and other current liabilities.