RESTRUCTURING CHARGES, INTEGRATION CHARGES AND IMPAIRMENT LOSSES

12 Months Ended

Dec. 31, 2020

RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES [Abstract]

RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES

(11)RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES

Restructuring Charges

During the years ended December 31, 2020, 2019 and 2018, 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.

During 2020 and 2018, TTEC determined it would close several delivery centers in the Engage segment and a $2.2 million and a net $4.8 million, respectively, was expensed related to early termination fees and cease use lease accruals. These expenses are included in the Restructuring charges, net in the Consolidated Statements of Comprehensive Income (Loss).

A summary of the expenses recorded for restructuring and included in Restructuring charges, net in the accompanying Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2020, 2019 and 2018, respectively, is as follows (in thousands):

	Year Ended December 31,
	2020		2019		2018
Reduction in force
TTEC Digital	$	668	$	141	$	133
TTEC Engage		396		894		694
Total	$	1,064	$	1,035	$	827

	Year Ended December 31,
	2020		2019		2018
Facility exit and other charges
TTEC Digital	$	90	$	41	$	—
TTEC Engage		2,110		671		5,304
Total	$	2,200	$	712	$	5,304

A rollforward of the activity in the Company’s restructuring accruals for the years ended December 31, 2020 and 2019, respectively, is as follows (in thousands):

	Reduction		Facility Exit and
	in Force		Other Charges		Total
Balance as of December 31, 2018	$	416	$	3,226	$	3,642
Expense		1,039		712		1,751
Payments		(1,145)		(962)		(2,107)
Changes due to foreign currency		(55)		15		(40)
Changes in estimates		(4)		—		(4)
Reclassifications due to ASU 842 implementation		—		(2,917)		(2,917)
Balance as of December 31, 2019		251		74		325
Expense		1,064		2,200		3,264
Payments		(1,067)		(1,729)		(2,796)
Changes due to foreign currency		(14)		(2)		(16)
Changes in estimates		(78)		—		(78)
Balance as of December 31, 2020	$	156	$	543	$	699

The remaining restructuring and other accruals are expected to be paid or extinguished during 2021 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 $3.0 million accrual was recorded with the expense included in Cost of services during the quarter ended June 30, 2020. During the third and fourth quarters, a total of $1.6 million was paid and a $0.3 million reduction in expense was recorded. 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 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 2020, 2019 and 2018, the Company recognized impairment losses, net related to leasehold improvement assets and right of use lease assets of $5.8 million, $2.7 million and $1.1 million, respectively, across the TTEC Digital and TTEC Engage segments.