RESTRUCTURING CHARGES, INTEGRATION CHARGES AND IMPAIRMENT LOSSES

9 Months Ended

Sep. 30, 2021

RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES [Abstract]

RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES

(9)RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES

Restructuring Charges

During 2021 and 2020, the Company continued restructuring activities primarily associated with reductions in the Company’s capacity, the workforce in certain locations, and related management in both segments to better align the capacity and workforce with current business needs. TTEC determined it would close several delivery centers servicing the Engage segment and the expenses related to early termination fees and cease use lease accruals were recorded. This expense was included in the Restructuring charges, net in the Consolidated Statements of Comprehensive Income (Loss).

A summary of the expenses recorded in Restructuring charges, net in the accompanying Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2021 and 2020, respectively, is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Reduction in force
TTEC Digital	$	—	$	347	$	858	$	668
TTEC Engage		—		—		(58)		239
Total	$	—	$	347	$	800	$	907

Facility exit and other charges
TTEC Digital	$	2	$	90	$	10	$	90
TTEC Engage		483		796		1,802		1,567
Total	$	485	$	886	$	1,812	$	1,657

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, 2020	$	156	$	543	$	699
Expense		884		1,812		2,696
Payments		(402)		(1,934)		(2,336)
Change due to foreign currency		—		1		1
Change in estimates		(84)		—		(84)
Balance as of September 30, 2021	$	554	$	422	$	976

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 when such employees 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 of 2020, a total of $1.6 million was paid and a $0.3 million reduction in expense was recorded. During the first, second and third quarters of 2021, a total of $0.5 million was paid and a $0.6 million reduction in expense was recorded. The accrual is expected to be paid or extinguished during the next three 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 the three and nine months ended September 30, 2021 the Company recognized impairment losses, net related to leasehold improvement assets and right of use lease assets of $(0.3) million and $0.4 million, respectively, across the TTEC Digital and TTEC Engage segments. During the three and nine months ended September 30, 2020 the Company recognized impairment losses, net related to leasehold improvement assets and right of use lease assets of $0.9 million and $1.6 million, respectively, across the TTEC Digital and TTEC Engage segments.