Restructuring

In the second quarter of fiscal year 2016, Semtech Corporation announced a worldwide reduction in force as part of an overall plan to align operating expenses with business conditions and leverage recent infrastructure investments. As a result of the reduction in force, the Company recorded restructuring charges of $3.6 million as of July 26, 2015. Such costs will consist primarily of termination benefits, including severance, which are expected to be settled in cash.

In the fourth quarter of fiscal year 2014, the Company made a strategic decision to reduce its investment in the long-haul optical market, realign its product groupings and align spending to current demand levels. As a result of these actions, the Company recorded restructuring charges of $1.0 million in the first six months of fiscal year 2015.

Restructuring related liabilities are included in “Accrued liabilities” within the condensed consolidated balance sheets as of July 26, 2015 and January 25, 2015, respectively. Restructuring charges are presented in “Restructuring charge” within the condensed consolidated statements of income.

The following table summarizes the restructuring activity for the six months ended July 26, 2015:



(in thousands)	One-time employee termination benefits
Balance at January 25, 2015	282
Charges	3,564
Cash payments	—
Balance at July 26, 2015	$	3,846