Severance Expense

9 Months Ended

Apr. 30, 2015

Severance Expense [Abstract]

Severance Expense

Note 8—Severance Expense

In February and March 2015, the Company completed a reduction of its workforce, which is expected to result in a reduction of approximately 7% of its global compensation costs beginning in the fourth quarter of fiscal 2015. The cost-cutting initiative is expected to reduce the Company’s current selling, general and administrative expense run rate by approximately $10 million per year. As a result of this reduction in headcount, the Company incurred severance expense of $6.2 million in the third quarter of fiscal 2015. Severance expense in the nine months ended April 30, 2015 also included $1.9 million due to a downsizing of certain IDT Telecom sales and administrative functions in Europe and the U.S in the first quarter of fiscal 2015. At April 30, 2015, there was accrued severance of $5.1 million included in “Accrued expenses” in the accompanying consolidated balance sheet for the February and March 2015 headcount reductions.