Restructuring

9 Months Ended

Sep. 30, 2022

Restructuring and Related Activities [Abstract]

Restructuring

RESTRUCTURING

In February 2022, the Company announced a new strategic business plan that includes a restructuring of its business to discontinue the integrated communications and collaboration platform, Spok Go®, eliminate all associated costs and optimize the Company’s existing structure to drive continued cost improvement. As part of the restructuring program, the Company initially estimated the elimination of approximately 175 positions, primarily in research and development, but also in professional services, selling and marketing, and back-office support functions. The Company currently expects total eliminations of approximately 183 positions, with the majority of positions having been terminated as of September 30, 2022. The following table provides a summary of our updated cost estimates by major type of expense associated with the strategic business plan. The restructuring activities associated with these changes are expected to be substantially completed by the fourth quarter of 2022.

Strategic Business Plan Estimates	Total Estimated Amount to be Incurred
Severance and personnel related costs	$5.7 million to $6.6 million
Contractual terminations	$1.3 million to $1.4 million
Total severance and restructuring related charges	$7.0 million to $8.0 million

For the three and nine months ended September 30, 2022, the Company incurred total severance and restructuring costs of $1.5 million and $6.4 million respectively, which are included within the Condensed Consolidated Statement of Operations. These costs are as follows:

	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
(Dollars in thousands)	2022		2022
Severance and personnel related costs	$	791	$	5,137
Contractual terminations	712		1,311
Total severance and restructuring costs	$	1,503	$	6,448

A summary of activity for the nine months ended September 30, 2022, for restructuring-related liabilities associated with the strategic business plan, which is included within accrued compensation and benefits and other current liabilities within the Condensed Consolidated Balance Sheet, is as follows:

	(Dollars in thousands)
Balance at December 31, 2021	$	—
Restructuring and other charges	4,495
Payments	(34)
Non-cash adjustment	(124)
Balance at March 31, 2022	$	4,337
Restructuring and other charges	525
Payments	(2,302)
Non-cash adjustment	(188)
Balance at June 30, 2022	$	2,372
Restructuring and other charges	807
Payments	(1,385)
Non-cash adjustment	(9)
Balance at September 30, 2022	$	1,785