Restructuring Charges

6 Months Ended

Jun. 30, 2022

Restructuring and Related Activities [Abstract]

Restructuring Charges

Restructuring Charges

2022 Strategic Realignment Plan

During the second quarter of 2022, the Company began implementing a plan to accelerate its transition to a platform company (the “2022 Strategic Realignment Plan”). The plan is designed to reorient the company around a single platform allowing us to pursue a portfolio-based marketing strategy that drives traffic to the edX marketplace. As part of the plan, the Company expects to optimize marketing spend, simplify the current executive structure to reduce silos, reduce employee headcount, and rationalize its real estate footprint.

The Company anticipates the headcount reductions to be completed in the third quarter of 2022 while the remainder of the plan is expected to be completed by the end of 2022. The Company anticipates that we will incur restructuring charges associated with the 2022 Strategic Realignment Plan of approximately $35 million to $40 million. The Company recorded $15.8 million in restructuring charges related to the 2022 Strategic Realignment Plan for each of the three and six months ended June 30, 2022. The majority of the estimated remaining restructuring charges relate to planned office closures expected to be completed by December 31, 2022, and will be recognized as expense over the remaining lease terms ranging from 1 to 9 years.

The following table presents restructuring charges by reportable segment on the Company’s condensed consolidated statements of operations for the periods indicated.

	Three Months Ended June 30, 2022				Six Months Ended June 30, 2022
	Degree Program Segment		Alternative Credential Segment		Degree Program Segment		Alternative Credential Segment
2022 Strategic Realignment Plan
Severance and severance-related costs	$	8,772	$	6,431	$	8,772	$	6,431
Professional and other fees relating to restructuring activities	554		—		554		—
	9,326		6,431		9,326		6,431
Other restructuring charges*	926		70		1,615		168
Total restructuring charges	$	10,252	$	6,501	$	10,941	$	6,599

* Includes severance and severance-related costs and costs associated with the exit of facilities

The Company recorded restructuring charges of $1.3 million and $1.8 million for the three and six months ended June 30, 2021, respectively.

Summary of Accrued Restructuring Liability

The following table presents the additions and adjustments to the accrued restructuring liability on the Company’s condensed consolidated balance sheets for the periods indicated.

		Balance as of December 31, 2021		Additional Costs		Cash Payments		Balance as of June 30, 2022
	(in thousands)
2022 Strategic Realignment Plan
Severance and severance-related costs		$	—	$	14,542	$	—	$	14,542
Professional and other fees relating to restructuring activities		—		554		—		554
Other severance and severance-related costs		1,735		728		(1,174)		1,289
Total restructuring		$	1,735	$	15,824	$	(1,174)	$	16,385