Restructuring Charges

6 Months Ended

Jun. 30, 2020

Restructuring and Related Activities [Abstract]

We incurred restructuring charges of $29.3 million and $46.9 million for the quarter and six months ended June 30, 2020, respectively, in connection with the centralization of our global sales and marketing structure and the reduction of our U.S. workforce.

Centralization of Global Sales and Marketing Structure

During the year ended December 31, 2019, we implemented a strategy related to the restructuring and centralization of our international sales and marketing structure. Activities related to this strategy focused on moving from a multi-brand sales model to a brand dedicated sales model, which resulted in the consolidation of some of our international offices and personnel reorganization among our sales and marketing teams. The personnel reorganization resulted in the recognition of a liability for one-time termination benefits during the twelve months ended December 31, 2019. We also incurred contract termination costs related to the closure of some of our international offices and other related costs consisting of legal and consulting fees to implement this initiative. As a result of these actions, we incurred restructuring exit costs of $12.0 million for the year ended December 31, 2019, which were reported within Marketing, selling and administrative expenses in our consolidated statements of comprehensive income (loss). As of June 30, 2020, we incurred $21.5 million restructuring costs and expect to incur $1.9 million additional costs as it relates to the restructuring activities of this strategy.

The following table summarizes our restructuring exit costs as it relates to the centralization of our global sales and marketing structure (in thousands):


	Beginning balance January 1, 2020		Accruals		Payments		Ending balance June 30, 2020		Cumulative Charges Incurred		Expected Additional Expenses to be Incurred
Termination benefits	$	8,389	$	2,620	$	2,748	$	8,261	$	11,500	$	312
Contract termination costs	338		—		—		338		338		390
Other related costs	2,785		6,837		6,996		2,626		9,645		1,247
Total	$	11,512	$	9,457	$	9,744	$	11,225	$	21,483	$	1,949

Operating Expense Reduction in Workforce

In April 2020, we reduced our US shoreside workforce by approximately 23% through a combination of permanent layoffs and 90-day furloughs with paid benefits. We incurred severance costs of $25.4 million during the quarter ended June 30, 2020. In July 2020, we incurred an additional $1.5 million of termination benefits related to this workforce reduction.

The following table summarizes our restructuring costs as it relates to the April 2020 reduction in our workforce (in thousands):


	Beginning balance January 1, 2020		Accruals		Payments		Ending balance June 30, 2020		Cumulative Charges Incurred		Expected Additional Expenses to be Incurred
Termination benefits	$	—	$	25,382	$	10,872	$	14,509	$	25,382	$	1,537
Contract termination costs	—		—		—		—		—		—
Other related costs	—		—		—		—		—		—
Total	$	—	$	25,382	$	10,872	$	14,509	$	25,382	$	1,537