2. Restructuring

2013 Restructuring

On July 25, 2013, the Board of Directors approved a plan of restructuring intended to bring the Company’s operating expenses better in line with revenues. The restructuring plan involved a realignment of organizational structures, facility consolidations/closures and headcount reductions of approximately 26% of the Company’s worldwide workforce. The restructuring plan was implemented primarily during the three month period ended September 30, 2013 and should result in annualized savings of approximately $16.0 million.

The restructuring plan resulted in special charges totaling $5.6 million recorded in the year ended December 31, 2013. These charges were for lease/rental terminations of $3.3 million, severance costs for affected employees of $1.1 million, equipment and improvements write-offs as a result of our lease/rental terminations of $1.0 million and other related costs of $0.2 million. All are cash expenditures except for the equipment and improvements write-offs. Approximately $1.4 million of cash expenditures were paid out in 2013, and the remaining cash expenditures will be paid in future years.

The following is the activity in our restructuring liability accounts of which $2.0 million is included in accrued liabilities and $1.4 million is included in deferred rent and other long term liabilities on the balance sheet for the year ended December 31, 2013 (in thousands):


	December 31, 2012										December 31, 2013
		Balance		Provision-net		Usage			Reclass			Balance
One-time employee termination benefits	$	-	$	1,152	$	(924	)	$	(13	)	$	215
Lease/rental terminations		-		3,260		(145	)		-			3,115
Fixed asset write-offs, transition travel, other		-		1,190		(1,165	)		13			38

Total	$	-	$	5,602	$	(2,234	)	$	-		$	3,368

2012 Restructuring

In February 2012, we undertook a restructuring that included a 7% reduction of headcount and other cost reductions that resulted in annualized savings of approximately $7.0 million. One-time employee termination and other costs resulted in restructuring expenses of $0.2 million recorded in the year ended December 31, 2012.

The following is the activity in our restructuring liability account which is included in accrued liabilities on the balance sheet for the year ended December 31, 2013 (in thousands):


	December 31, 2012										December 31, 2013
		Balance		Provision-net		Usage			Reclass			Balance
One-time employee termination benefits	$	8	$	-	$	-		$	(4	)	$	4
Lease/rental terminations		-		-		-			-			-
Relocation, move, other expenses		-		-		(4	)		4			-
Total	$	8	$	-	$	(4	)	$	-		$	4

The remaining balance in the restructuring reserve is estimated to be used by the end of the fiscal year ending December 31, 2014.