Restructuring

In 2017, Aon initiated a global restructuring plan (the “Restructuring Plan”) in connection with the sale of its benefits administration and business process outsourcing business. The Restructuring Plan is intended to streamline operations across the organization and deliver greater efficiency, insight, and connectivity. The Company expects these restructuring activities and related expenses to affect continuing operations through 2019, including an estimated 1,600 to 1,900 role eliminations. The Restructuring Plan is expected to result in cumulative costs of approximately $750 million through the end of the plan, consisting of approximately $207 million in employee termination costs, $146 million in technology rationalization costs, $176 million in real estate consolidation costs, $40 million in asset impairments, and $181 million in other costs, including certain separation costs associated with the sale of the benefits administration and business process outsourcing business. Included in the estimated $750 million is $50 million of estimated non-cash charges related to asset impairments and lease consolidations.

From the inception of the Restructuring Plan through March 31, 2017, 1,065 positions have been eliminated and total expenses of $144 million have been incurred for restructuring and related separation costs. These charges are included in Compensation and benefits, Information technology, Premises, Depreciation of fixed assets, and Other general expenses in the accompanying Condensed Consolidated Statements of Income.

The following summarizes restructuring and separation costs by type that have been incurred through March 31, 2017 and are estimated to be incurred through the end of the Restructuring Plan (in millions):



	First Quarter 2017		Estimated Remaining Costs		Estimated Total Cost ⁽¹⁾
Workforce reduction	$	103	$	104	$	207
Technology rationalization	3		143		146
Lease consolidation	3		173		176
Asset impairments	13		27		40
Other costs associated with restructuring and separation ⁽²⁾	22		159		181
Total restructuring and related expenses	$	144	$	606	$	750

(1)

Actual costs, when incurred, may vary due to changes in the assumptions built into the Restructuring Plan. Significant assumptions that may change when plans are finalized and implemented include, but are not limited to, changes in severance calculations, changes in the assumptions underlying sublease loss calculations due to changing market conditions, and changes in the overall analysis that might cause the Company to add or cancel component initiatives.


(2)	Other costs associated with the Restructuring Plan, including costs to separate the Divested Business, as well as moving costs, consulting and legal fees. These costs are generally recognized when incurred.

As of March 31, 2017, the Company’s liabilities for the Restructuring Plan are as follows (in millions):



	Restructuring Plan
Balance at January 1, 2017	$	—
Expensed	130
Cash payments	(31		)
Foreign currency translation and other	9
Balance at March 31, 2017	$	108