Impairment Charges

9 Months Ended

Aug. 01, 2021

Restructuring and Related Activities [Abstract]

Restructuring and Severance Charges

The Company incurred total restructuring and severance costs of $0.5 million and $0.5 million in the third quarter of fiscal 2021 and 2020, respectively, and $1.7 million and $2.2 million for the nine months ended August 1, 2021 and August 2, 2020, respectively.

2020 Restructuring Plan

In the first quarter of fiscal 2020, the Company approved a restructuring plan (the “2020 Plan”) as part of its strategic initiative to optimize the Company’s cost infrastructure. The 2020 Plan leveraged the global capabilities of the Company's staffing operations based in Bangalore, India and off-shored a significant number of strategically identified roles to this location. The total costs incurred in connection with the 2020 Plan were $1.2 million, consisting of $0.1 million in North American Staffing, $0.1 million in International Staffing and $1.0 million in the Corporate and Other category.

Other Restructuring Costs

As part of its continued efforts to reduce costs, the Company recorded other restructuring costs. In the third quarter of fiscal 2021, the Company recorded $0.5 million related to ongoing costs of facilities impaired in the second half of fiscal 2020. In the third quarter of fiscal 2020, the Company recorded severance costs of $0.6 million primarily resulting from the elimination of certain positions.

Accrued restructuring and severance costs are included in Accrued compensation and Accrued insurance and other in the Condensed Consolidated Balance Sheets. Activity for the first nine months of fiscal 2021 is summarized as follows (in thousands):


	August 1, 2021
Balance, beginning of year	$	212
Charged to expense	1,716
Cash payments	(1,857)
Ending Balance	$	71

The remaining balance as of August 1, 2021 was $0.1 million, primarily related to other restructuring costs in the Corporate and Other category.

Impairment Charges

Long-lived assets primarily consist of right-of-use assets, capitalized software costs, leasehold improvements and office equipment. The Company reviews these assets for impairment under Accounting Standards Codification 360 Property, Plant and Equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized if its carrying amount is not recoverable and exceeds its fair value. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value based on discounted cash flow analysis or other valuation techniques.

In the third quarter of fiscal 2021, the Company recorded an impairment charge of $0.1 million of capitalized software costs related to a change in the expected use of certain assets in the Corporate and Other category.

Due to the economic impact and uncertainty related to the COVID-19 pandemic, certain real estate rationalization decisions were made in the third quarter of fiscal 2020 resulting in the Company consolidating and exiting certain leased office locations throughout North America based on where the Company could be fully operational and successfully support its clients and business operations remotely. The changes in the use of these right-of-use assets triggered an impairment review and, based on the results of this review, the Company recorded impairment charges of $1.8 million for the North American Staffing segment and $0.6 million for the Corporate and Other category to reduce the carrying value of these assets to their estimated fair value. Significant assumptions used to estimate fair value were the current economic environment, real estate market conditions and general market participant assumptions.