Note 10 - Restructuring

12 Months Ended

Dec. 31, 2012

2012 Restructuring Plan

In the fourth quarter of 2012, we implemented a global restructuring plan designed to simplify and streamline our organization and strengthen the overall competitiveness of our existing businesses. The plan includes a strategic reduction of our existing global workforce by approximately 600 employees and 300 contractors and related activities, including the closure of certain facilities and asset impairments. The majority of the costs impacts our PayPal and GSI businesses. In connection with the plan, we incurred aggregate charges of approximately $31 million as of December 31, 2012, primarily related to severance and benefits. We expect to incur additional charges of approximately $1 million by the completion of the plan, which is currently scheduled for the first quarter of 2013.

The following table summarizes restructuring and other related charges by segment recognized for the year ended December 31, 2012:



	Severance and Benefits		Other		Total
	(In millions)
Marketplaces	$	2	$	—	$	2
Payments	18		1		19
GSI	8		—		8
Corporate	2		—		2
	$	30	$	1	$	31

The above restructuring and other related charges are included in general and administrative expenses on the consolidated statement of income.

The following table summarizes the restructuring reserve activity during the year ended December 31, 2012:



	Severance and Benefits			Other			Total
	(In millions)
Accrued liability as of January 1, 2012	$	—		$	—		$	—
Charges	30			1			31
Payments	(10		)	—			(10		)
Non-cash settlements	—			(1		)	(1		)
Accrued liability as of December 31, 2012	$	20		$	—		$	20

2009 Customer Service Consolidation

In 2009, we began the consolidation of certain customer service facilities in North America and Europe to streamline our operations and deliver better and more efficient customer support to our users. We completed these activities during the first quarter of 2011. The consolidation impacted approximately 1,000 employees. In connection with the consolidation, we incurred total costs of approximately $47 million, primarily related to employee severance and benefits, of which $21 million was incurred in 2010. These restructuring costs are presented in general and administrative expenses on the consolidated statement of income.

The following table summarizes by segment the restructuring costs recognized during the years ended December 31, 2010:



	Employee Severance and Benefits			Facilities		Total
	(In millions)
Marketplaces	$	19		$	3	$	22
Payments	(1		)	—		(1		)
	$	18		$	3	$	21

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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