Employee Termination, Asset Impairment and Other Charges

12 Months Ended

Jul. 02, 2021

Employee Termination, Asset Impairment and Other Charges

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



	2021		2020		2019
	(in millions)
Employee termination and other charges:
Closure of Foreign Manufacturing Facilities	$	—	$	5	$	22
Business Realignment	28		44		144

Total employee termination and other charges	28		49		166








Gain on disposition of assets:


Business Realignment	(75)		(17)		—
Total gain on disposition of assets	(75)		(17)		—
Total employee termination, asset impairment, and other charges	$	(47)	$	32	$	166

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.

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 Company may also record credits related to gains upon sale of property in connection with these activities. The Company recognized gains related to the disposition of assets associated with these activities $75 million and $17 million for 2021 and 2020, respectively.

The following table presents an analysis of the components of the activity against the reserve during the year ended July 2, 2021:


	Employee Termination Benefits		Contract Termination and Other		Total
	(in millions)








Accrual balance at July 3, 2020	$	13	$	—	$	13
Charges	25		3		28
Cash payments	(36)		(3)		(39)

Accrual balance at July 2, 2021	$	2	$	—	$	2