Employee Termination, Asset Impairment and Other Charges

3 Months Ended

Oct. 04, 2019

Employee Termination, Asset Impairment and Other Charges

The Company recorded the following charges related to employee terminations benefits, asset impairment, and other charges:



	Three Months Ended
	October 4, 2019		September 28, 2018
	(in millions)
Employee termination and other charges:
Closure of Foreign Manufacturing Facilities	$	4	$	4
Business Realignment	4		42
Total employee termination and other charges	$	8	$	46

Closure of Foreign Manufacturing Facilities

In July 2018, the Company announced the closing of its HDD manufacturing facility in Kuala Lumpur, Malaysia, in order to reduce its manufacturing costs and consolidate HDD operations into Thailand. The Company substantially completed the closure in fiscal year 2019.

The following table presents an analysis of the components of the restructuring charges, payments and adjustments made against the reserve during the three months ended October 4, 2019:



	Employee Termination Benefits			Contract Termination and Other			Total
	(in millions)
Accrual balance at June 28, 2019	$	30		$	2		$	32
Charges	2			2			4
Cash payments	(18		)	(3		)	(21		)
Accrual balance at October 4, 2019	$	14		$	1		$	15

Business Realignment

The Company periodically incurs charges as part of the integration process of recent acquisitions and to realign its operations with anticipated market demand, primarily consisting of organization rationalization designed to streamline its business, reduce its cost structure and focus its resources.

The following table presents an analysis of the components of the activity against the reserve during the three months ended October 4, 2019:



	Employee Termination Benefits			Contract Termination and Other			Total
	(in millions)
Accrual balance at June 28, 2019	$	37		$	8		$	45
Charges	3			1			4
Cash payments	(16		)	(8		)	(24		)
Accrual balance at October 4, 2019	$	24		$	1		$	25