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RESTRUCTURING CHARGES, INTEGRATION CHARGES AND IMPAIRMENT LOSSES
6 Months Ended
Jun. 30, 2020
RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES [Abstract]  
RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES

(9)RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES

Restructuring Charges

During the three and six months ended June 30, 2020 and 2019, the Company continued restructuring activities primarily associated with reductions in the Company’s capacity, workforce and related management in both segments to better align the capacity and workforce with current business needs.

A summary of the expenses recorded in Restructuring charges, net in the accompanying Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2020 and 2019, respectively, is as follows (in thousands):

Three Months Ended 

Six Months Ended 

June 30,

June 30,

2020

    

2019

    

2020

    

2019

 

    

 

Reduction in force

TTEC Digital

$

114

 

$

 

$

321

$

TTEC Engage

 

3

 

308

 

239

 

770

Total

$

117

 

$

308

 

$

560

$

770

Three Months Ended 

Six Months Ended 

 

June 30,

June 30,

2020

    

2019

    

2020

    

2019

    

 

Facility exit and other charges

TTEC Digital

$

 

$

 

$

$

TTEC Engage

 

676

 

120

 

771

 

619

Total

$

676

 

$

120

 

$

771

$

619

A rollforward of the activity in the Company’s restructuring accrual is as follows (in thousands):

    

Reduction

    

Facility Exit and

    

 

    

in Force

    

Other Charges

    

           Total           

 

Balance as of December 31, 2019

$

251

 

$

74

 

$

325

Expense

 

560

771

 

1,331

Payments

 

(719)

(807)

 

(1,526)

Change due to foreign currency

(14)

(5)

(19)

Change in estimates

 

 

Balance as of June 30, 2020

$

78

 

$

33

 

$

111

The remaining restructuring and other accruals are expected to be paid or extinguished during the next twelve months and are all classified as current liabilities within Other accrued expenses in the Consolidated Balance Sheets.

Severance Charges

In the normal course of business, the Company will pay severance to terminated employees related to programs that are ending who are no longer needed and cannot be repurposed to a new program.

During the second quarter of 2020, a $2.9 million accrual was recorded with the expense included in Cost of services during the quarter ended June 30, 2020. The accrual is expected to be paid or extinguished during the next six months and thus is classified as current liabilities within Other accrued expenses in the Consolidated Balance Sheets.

Impairment Losses

During each of the periods presented, the Company evaluated the annual recoverability of its leasehold improvement assets at certain customer engagement centers. An asset is considered to be impaired when the anticipated undiscounted future cash flows of its asset group are estimated to be less than the asset group’s carrying value. The amount of impairment recognized is the difference between the carrying value of the asset group and its fair value. To determine fair value, the Company used Level 3 inputs in its discounted cash flows analysis. Assumptions included the amount and timing of estimated future cash flows and assumed discount rates. During the three and six months ended June 30, 2020, the Company recognized impairment losses related to leasehold improvement assets and right of use lease assets of zero and $0.7 million, respectively, for the TTEC Digital segment. During the three and six months ended June 30, 2019, the Company recognized impairment losses related to leasehold improvement assets and right of use lease assets of $1.1 million and $2.6 million, respectively, across the TTEC Digital and TTEC Engage segments.