Restructuring

12 Months Ended

Dec. 31, 2022

Restructuring and Related Activities [Abstract]

During the year ended December 31, 2022, we initiated several measures to pursue greater cost efficiency and to realign our business and strategic priorities.

Beginning in the third quarter of 2022, as a part of our facilities consolidation strategy, we made a decision to sublease, early terminate, or abandon several office buildings under operating leases to align our real property lease arrangements with our anticipated operating needs. As a result, we recorded impairment charges for the related operating lease right-of-use (ROU) assets and leasehold improvements.

In November 2022, we announced a layoff of approximately 11,000 of our employees across the FoA and RL segments. As a result, we recorded severance and other personnel related expenses for the impacted employees.

In December 2022, we reevaluated our data center investment strategy to improve efficiency and further advance our efforts around artificial intelligence. As a result, we decided to pivot several of our data center building projects to a next generation design while also canceling multiple existing data center projects. This strategy led to abandonment charges of the related data center assets.

A summary of our restructuring charges for the year ended December 31, 2022 by major activity type is as follows (in millions):


	Facilities Consolidation (1)		Severance and Other Personnel Costs		Data Center Assets		Total
Cost of revenue	$	154	$	—	$	1,341	$	1,495
Research and development	1,311		408		—		1,719
Marketing and sales	404		234		—		638
General and administrative	426		333		—		759
Total	$	2,295	$	975	$	1,341	$	4,611

________________________

(1)Facilities consolidation includes impairment charges and accelerated expenses related to certain operating lease ROU assets and leasehold improvements.

Total restructuring charges recorded under our FoA segment were $4.10 billion and RL segment were $515 million.

The following table is a summary of the changes in the severance and other personnel liabilities, included within accrued expenses and other current liabilities on the consolidated balance sheets, related to the workforce reduction (in millions):


Balance as of January 1, 2022	$	—
Severance and other personnel costs	975
Cash payments during the period	(203)
Balance as of December 31, 2022 (1)	$	772

__________________________

(1)We expect the remaining severance and termination related liabilities to be substantially paid out in cash during the first half of 2023.