Restructuring and Related Charges

3 Months Ended

Jul. 03, 2021

Restructuring and Related Activities [Abstract]

Restructuring and Related Charges

RESTRUCTURING AND RELATED CHARGES

In the first quarter of fiscal 2020, the Company approved a restructuring program (the “2020 Program”), which is expected to contribute to the Company’s overall strategy of financial fitness through the elimination of overhead and consolidation of certain enterprise functions. We recognized $60 million of cumulative pretax charges in fiscal 2020 associated with the 2020 Program consisting of severance and employee related costs. As part of the 2020 Program, we are eliminating positions across several areas and job levels, with eliminated positions originating from the corporate offices in Springdale, Arkansas, and Chicago, Illinois, as well as certain production facility and supply chain administrative positions. The majority of the positions have already been or are expected to be eliminated by the end of fiscal 2021. We do not anticipate future costs of the 2020 Program to be significant.

For the three and nine months ended July 3, 2021, we did not incur restructuring and related charges. For the three months ended June 27, 2020, we did not incur significant restructuring and related charges. For the nine months ended June 27, 2020, we recognized restructuring and related charges of $54 million, primarily consisting of severance and employee related costs and technology related costs, of which $5 million was recorded in Cost of Sales and $49 million was recorded in Selling, General and Administrative in our Consolidated Condensed Statements of Income.

Our restructuring liability was $8 million at July 3, 2021 and $37 million at October 3, 2020. The change in the restructuring liability was due to reductions of $29 million, primarily consisting of payments, during the nine months ended July 3, 2021.