Company Restructuring

9 Months Ended

Sep. 30, 2021

Restructuring and Related Activities [Abstract]

Company Restructuring

Note 12 Company Restructuring

The Company undertakes various programs to reduce expenses. These programs generally involve a reduction in staffing levels, and in certain cases, office closures. Restructuring and related charges primarily include the following costs related to these programs:

•Employee - severance and relocation benefits

•Exit - contract termination penalties

The expenses related to these activities are included in the Condensed Consolidated Statements of Operations as restructuring and related charges and totaled $23 million and $196 million during the three months ended September 30, 2021 and 2020, respectively, and $145 million and $213 million during the nine months ended September 30, 2021 and 2020, respectively.

Restructuring expenses during the third quarter and first nine months of 2021 are primarily due to the future work environment. The Company continues to identify ways to improve operating efficiency and reduce cost which may result in additional restructuring charges in the future.

Restructuring programs
($ in millions)	Future work environment		Transformative Growth
Expected program charges	$	110	$	290
2020 expenses	—		(238)
2021 expenses	(108)		7
Change in estimated program costs in 2021	30		(52)
Remaining program charges	$	32	$	7

These charges are primarily recorded in the Allstate Protection segment. The Company expects that a majority of these actions will be completed in 2021.

Employee costs include severance and employee benefits primarily impacting claims, sales, service and support functions. Exit costs, primarily related to future work environment, reflect real estate costs due to accelerated amortization of right of use assets and related leasehold improvements at facilities to be vacated.

Restructuring activity during the period
($ in millions)	Employee costs		Exit costs		Total liability
Restructuring liability as of December 31, 2020	$	72	$	—	$	72
Expense incurred	50		120		170
Adjustments to liability	(25)		—		(25)
Payments and non-cash charges	(51)		(112)		(163)
Restructuring liability as of September 30, 2021	$	46	$	8	$	54

As of September 30, 2021, the cumulative amount incurred to date for active programs related to employee severance, relocation benefits and exit expenses totaled $247 million for employee costs and $133 million for exit costs.