Restructuring

3 Months Ended

Mar. 31, 2021

Restructuring and Related Activities [Abstract]

During 2019, we began implementing a plan aimed at refocusing our resources on our largest opportunities and removing unnecessary levels of complexity from certain parts of our business. We have been:

•increasing our investment in development for our largest, internally-owned franchises—across upfront releases, in-game content, mobile, and geographic expansion;

•reducing certain non-development and administrative-related costs across our business; and

•integrating our global and regional sales and “go-to-market,” partnerships, and sponsorships capabilities across the business, which we believe will enable us to provide better opportunities for talent, and greater expertise and scale on behalf of our business units.

The restructuring actions remain in progress as we continue to focus on these goals.

The following table summarizes accrued restructuring and related costs included in “Accrued expenses and other liabilities” in our condensed consolidated balance sheet and the cumulative charges incurred (amounts in millions):


	Severance and employee-related costs		Facilities and related costs		Other costs		Total
Balance at December 31, 2020	$	88	$	—	$	3	$	91
Costs charged to expense	24		1		2		27
Cash payments	(9)		—		(1)		(10)
Non-cash charge adjustment	(2)		(1)		(1)		(4)
Balance at March 31, 2021	$	101	$	—	$	3	$	104









Cumulative charges incurred through March 31, 2021	$	176	$	36	$	34	$	246

Total restructuring and related costs by segment are (amounts in millions):


	Three Months Ended March 31,
		2021		2020
Activision		$	1	$	2
Blizzard		23		21
King		1		(1)
Other segments (1)		2		1
Total		$	27	$	23

(1) Includes charges outside of our reportable segments, including charges for our corporate and administrative functions.

During the three months ended March 31, 2021, we incurred additional restructuring charges that are not included in the plan discussed above. Such amounts were not material.

We expect to incur total aggregate pre-tax restructuring charges of approximately $310 million associated with the plan, of which we expect the remaining charges that have not yet been recognized to largely be incurred by the end of 2021. The charges associated with the plan are expected to relate to severance and employee-related costs (approximately 60% of the aggregate charge), facilities and related costs (approximately 20% of the aggregate charge), and other costs (approximately 20% of the aggregate charge), including charges for restructuring related fees and the write-down of assets. A substantial majority (approximately 70%) of the total pre-tax charge associated with the restructuring is expected to be paid in cash using amounts on hand, and such cash outlays are largely expected to be completed by the end of 2021. We do not expect to realize significant net savings in our total operating expenses as a result of our plan, as cost reductions in our selling, general and administrative activities is expected to be offset by increased investment in product development.

The total charges incurred through March 31, 2021 and total expected pre-tax restructuring charges related to the plan, by segment, inclusive of amounts already incurred and inclusive of certain inventory write-downs in prior years, are presented below (amounts in millions):


	Total Charges Incurred Through March 31, 2021		Total Charges Expected as of March 31, 2021
Activision	$	33	$	44
Blizzard	167		205
King	20		22
Other segments (1)	31		39
Total	$	251	$	310

(1) Includes charges outside of our reportable segments, including charges for our corporate and administrative functions.