Restructuring, Severance and Related Charges

12 Months Ended

Aug. 31, 2024

Restructuring and Related Activities [Abstract]

Restructuring, Severance and Related Charges

Following is a summary of the Company’s restructuring, severance and related charges (in millions):


	Fiscal Year Ended August 31,
	2024(1)		2023(2)		2022(2)
Employee severance and benefit costs	$	177	$	48	$	18
Lease costs	2		—		—
Asset write-off costs	79		5		—
Other costs	38		4		—
Total restructuring, severance and related charges(3)	$	296	$	57	$	18

(1)Primarily relates to the 2024 Restructuring Plan.

(2)Primarily relates to headcount reduction to further optimize the Company's business activities.

(3)Includes $76 million, $10 million and $1 million recorded in the EMS segment, $152 million, $35 million and $10 million recorded in the DMS segment and $68 million, $12 million and $7 million of non-allocated charges for the fiscal years ended August 31, 2024, 2023 and 2022, respectively. Except for asset write-off costs, all restructuring, severance and related charges are cash costs.

2024 Restructuring Plan

On September 26, 2023, the Company’s Board of Directors approved a restructuring plan to (i) realign the Company’s cost base for stranded costs associated with the Company’s sale and realignment of its Mobility Business and (ii) optimize the Company’s global footprint. This action includes headcount reductions across our Selling, General and Administrative (“SG&A”) cost base and capacity realignment (the “2024 Restructuring Plan”).

The 2024 Restructuring Plan, totaling approximately $300 million in pre-tax restructuring and other related costs, is substantially complete as of August 31, 2024.

The table below summarizes the Company’s liability activity, primarily associated with the 2024 Restructuring Plan (in millions):


	Employee Severance and Benefit Costs		Lease Costs		Asset Write-off Costs		Other Related Costs		Total
Balance as of August 31, 2023	$	—	$	—	$	—	$	—	$	—
Restructuring related charges	177		2		79		38		296
Asset write-off charge and other non-cash activity	4		—		(79)		(16)		(91)
Cash payments	(115)		(1)		—		(17)		(133)
Balance as of August 31, 2024	$	66	$	1	$	—	$	5	$	72

2025 Restructuring Plan

On September 24, 2024, the Company’s Board of Directors approved a restructuring plan to align our support infrastructure to further optimize organizational effectiveness. This action includes headcount reductions across our SG&A and manufacturing cost base and capacity realignment (the “2025 Restructuring Plan”). The 2025 Restructuring Plan reflects the Company’s intention only and restructuring decisions, and the timing of such decisions, at certain locations are still subject to consultation with the Company’s employees and their representatives.

The Company currently expects to recognize approximately $150 million to $200 million in pre-tax restructuring and other related costs over the course of the Company’s 2025 fiscal year. The charges relating to the 2025 Restructuring Plan are currently expected to result in net cash expenditures of approximately $100 million to $130 million that will be payable over the course of the Company’s fiscal years 2025 and 2026. The exact timing of these charges and cash outflows, as well as the estimated cost ranges by category type, have not been finalized. This information will be subject to the finalization of timetables for the transition of functions, consultation with employees and their representatives as well as the statutory severance requirements of the jurisdictions impacted, and the amount and timing of the actual charges may vary due to a variety of factors. The Company’s estimates for the charges discussed above exclude any potential income tax effects.