Restructuring

12 Months Ended

Dec. 31, 2021

Restructuring and Related Activities [Abstract]

Restructuring

17. Restructuring

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 sponsorship 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.

We have substantially completed all actions under our plan and have accrued for these costs accordingly. The remaining activity under the plan is primarily related to cash outlays to be made to impacted personnel.

The following table summarizes accrued restructuring and related costs included in “Accrued expenses and other liabilities” and “Other liabilities” in our 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, 2019	$	32	$	—	$	3	$	35
Costs charged to expense	76		6		5		87
Cash payments	(20)		—		(5)		(25)
Non-cash charge adjustment (1)	—		(6)		—		(6)
Balance at December 31, 2020	$	88	$	—	$	3	$	91
Costs charged to expense	36		16		27		79
Cash payments	(55)		—		(6)		(61)
Non-cash charge adjustment (1)	(5)		(16)		(3)		(24)
Balance at December 31, 2021	$	64	$	—	$	21	$	85
Cumulative charges incurred through December 31, 2021	$	188	$	51	$	59	$	298

(1)Adjustments primarily relate to non-cash charges included in “Costs charged to expense” for write-down of assets for our lease facilities, inclusive of lease right-of-use assets and associated fixed assets, that were vacated.

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

	Years Ended
	December 31, 2021		December 31, 2020		December 31, 2019
Activision	$	2	$	13	$	19
Blizzard	70		71		68
King	1		(1)		20
Other segments (1)	6		4		25
Total	$	79	$	87	$	132

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

During the years ended December 31, 2021 and 2020, we incurred additional restructuring charges and adjustments that are not included in the plan discussed above. Such amounts were not material.

We have substantially completed our accruals for all actions under the plan. The charges associated with the plan primarily relate to severance and employee-related costs (approximately 62% of the aggregate charge), facilities and related costs (approximately 17% of the aggregate charge), and other costs (approximately 21% of the aggregate charge), including charges for restructuring-related fees and the write-down of assets. A substantial majority (approximately 77%) 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 within the next 12 months. 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 are expected to be offset by increased investment in product development.

The total charges incurred through December 31, 2021, which represent our 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 December 31, 2021
Activision	$	34
Blizzard	214
King	21
Other segments (1)	34
Total	$	303

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