Restructuring Activities

6 Months Ended

Jun. 30, 2019

5.	Restructuring Activities

On December 27, 2017, the board of GSE approved an international restructuring plan to streamline and optimize the Company's global operations. Beginning in December 2017, GSE has been in the process of consolidating its engineering services and R&D activities to Maryland and ceasing an unprofitable non-core business in the United Kingdom (UK). As a result, the Company closed its offices in Nyköping, Sweden; Chennai, India; and Stockton-on-Tees, UK. These actions are designed to improve Company productivity by eliminating duplicate employee functions, increasing GSE's focus on its core business, improving efficiency and maintaining the full range of engineering capabilities while reducing costs and organizational complexity.

GSE eliminated approximately 40 positions since 2017 due to these changes, primarily in Europe and India, and will undertake other cost-savings measures. The restructuring plan is expected to be completed by the end of 2019. As a result of these efforts, GSE expects to record a total restructuring charge of approximately $2.2 million, primarily related to workforce reductions, contract termination costs and asset write-offs due to the exit activities. As of June 30, 2019, we had recorded total restructuring charges totaling $2.0 million since 2017. We incurred $2,000 costs during the six months ended June 30, 2019. We recognized $1.3 million of restructuring cost for the year ended December 31, 2018. In addition to the total recognized restructuring costs, the Company has an estimated $1.3 million of cumulative translation adjustments that will be charged against net loss and an estimated $1.0 million of tax benefits that will be realized upon liquidation of these foreign entities. GSE expects to recognize the remaining restructuring costs, currency translation adjustments and tax benefits by the end of 2019.

For the six months ended June 30, 2019, we made payments related to our restructuring for employee termination benefits and other legal expenses in the amount of $54,000 that had been previously accrued.