Restructuring Activities and Charges

3 Months Ended

Mar. 31, 2020

Restructuring and Related Activities [Abstract]

2018 Restructuring Plan

On August 10, 2018, the Company approved a plan to reduce the Company's cost structure while driving value for its clients and stockholders. The plan was adopted as a result of the Company's determination that its selling, general and administrative costs were disproportionately high in relation to its revenue and gross profit. At the time of adoption, the plan was expected to be completed by the end of 2019 and the Company expected to incur pre-tax cash restructuring charges of $20.0 million to $25.0 million and pre-tax non-cash restructuring charges of $0.4 million. Where required by law, the Company consults with each of the affected country’s local Works Councils prior to implementing the plan. On February 21, 2019, the Board of Directors approved a two-year extension to the restructuring plan through the end of 2021.

On February 24, 2020, the Company approved an increase in the size of the 2018 Restructuring Plan. From adoption through completion of the plan, the Company expects to incur pre-tax cash restructuring charges of $35.0 million to $45.0 million and pre-tax non-cash restructuring charges of $0.5 million. Cash charges are expected to include $9.0 million to $12.0 million for employee severance and related benefits, $8.0 million to $10.0 million for consulting fees and lease and contract terminations,

and $18.0 million to $23.0 million for compensation realignment and other retention. The Company's increased 2018 Restructuring Plan will cover cost-reduction actions associated with the COVID-19 pandemic.

The following table summarizes the accrued restructuring activities for this plan for the three months ended March 31, 2020 (in thousands):



	Employee Severance and Related Benefits			Lease and Contract Termination Costs			Compensation Realignment and Other Retention			Other			Total
Balance as of December 31, 2019	$	666		$	23		$	3,636		$	258		$	4,583
Charges	534			358			2,399			346			3,637
Prepayments⁽¹⁾	—			—			104			—			104
Cash payments	(1,117		)	(358		)	(2,876		)	(206		)	(4,557		)
Non-cash settlements/adjustments⁽²⁾	15			(2		)	—			—			13
Balance as of March 31, 2020	$	98		$	21		$	3,263		$	398		$	3,780

⁽¹⁾For compensation realignment and other retention amounts, expense is recognized over a mandatory future service period, whereby payments occur at certain intervals throughout the mandatory future service period. Prepayments reflected in this line item represent payments that have occurred as of March 31, 2020.

⁽²⁾Non-cash settlements and adjustments consist of (1) differences in total lease expense per ASC 842 and cash rental payments for leases that qualify to be recorded to restructuring and (2) foreign currency impacts.

The Company recorded the following restructuring costs by segment (in thousands):



	Three Months Ended March 31,
	2020		2019
North America	$	2,236	$	192
EMEA	880		1,079
LATAM	164		35
Other	357		2,628
Total	$	3,637	$	3,934

From adoption through March 31, 2020, the Company recognized $25.6 million in total restructuring charges pursuant to the 2018 Restructuring Plan.

2015 Restructuring Plan

On December 14, 2015, the Company approved a global realignment plan that allowed the Company to more efficiently meet client needs across its international platform. Through improved integration of global resources, the plan created back office and other efficiencies and allowed for the elimination of approximately 100 positions. In connection with these actions, the Company incurred total pre-tax cash restructuring charges of $6.7 million, the majority of which were recognized during 2016. These cash charges included approximately $5.6 million for employee severance and related benefits and $1.1 million for lease and contract terminations and other associated costs. The charges were all incurred by the end of 2016 with the final payouts occurring during the three months ended March 31, 2020.

The following table summarizes the accrued restructuring activities for this plan for the three months ended March 31, 2020 (in thousands), all of which relate to EMEA:



	Employee Severance and Related Benefits			Lease and Contract Termination Costs		Other		Total
Balance as of December 31, 2019	$	122		$	—	$	—	$	122
Charges	(36		)	—		—		(36		)
Cash payments	(86		)	—		—		(86		)
Balance as of March 31, 2020	$	—		$	—	$	—	$	—