Restructuring Programs

6 Months Ended

Jun. 30, 2020

Restructuring and Related Activities [Abstract]

We engage in restructuring actions, including Project Own It, as well as other transformation efforts in order to reduce our cost structure and realign it to the changing nature of our business and to achieve operating efficiencies through a number of opportunities including reduction of our real estate footprint.

During the six months ended June 30, 2020, we recorded net restructuring and asset impairment charges of $27, which included $39 of severance costs related to headcount reductions of approximately 450 employees worldwide, $1 of other contractual termination costs and $2 of asset impairment charges. These costs were partially offset by $15 of net reversals, primarily resulting from changes in estimated reserves from prior period initiatives.

Information related to restructuring program activity is outlined below:


	Severance and Related Costs		Other Contractual Termination Costs⁽²⁾		Asset Impairments⁽³⁾		Total
Balance at December 31, 2019	$	66	$	4	$	—	$	70
Provision	32		1		2		35
Reversals	(5)		—		(1)		(6)
Net current period charges⁽¹⁾	27		1		1		29
Charges against reserve and currency	(36)		2		(1)		(35)
Balance at March 31, 2020	$	57	$	7	$	—	$	64
Provision	7		—		—		7
Reversals	(6)		(1)		(2)		(9)
Net current period charges⁽¹⁾	1		(1)		(2)		(2)
Charges against reserve and currency	(14)		(1)		2		(13)
Balance at June 30, 2020	$	44	$	5	$	—	$	49

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(1)Represents net amount recognized within the Condensed Consolidated Statements of Income for the period shown for restructuring and asset impairment charges.

(2)Primarily includes additional costs incurred upon the exit from our facilities including decommissioning costs and associated contractual termination costs. Charges for first quarter 2020 include a reclassification of $4 related to expected recovery from sublease.

(3)Primarily related to the exit and abandonment of leased and owned facilities. The charge includes the accelerated write-off of $1 for leased right-of-use assets and $1 for owned assets upon exit from the facilities, net of any potential sublease income and other recoveries.

The following table summarizes the reconciliation to the Condensed Consolidated Statements of Cash Flows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Charges against reserve and currency	$	(13)	$	(29)	$	(48)	$	(98)

Effects of foreign currency and other non-cash items	(4)		8		(4)		44
Restructuring cash payments	$	(17)	$	(21)	$	(52)	$	(54)

In connection with our restructuring programs, we also incurred certain related costs as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Retention related severance/bonuses⁽¹⁾	$	4	$	11	$	11	$	20
Contractual severance costs⁽²⁾	—		—		4		38
Consulting and other costs⁽³⁾	1		8		2		19
Total	$	5	$	19	$	17	$	77

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(1)Includes retention related severance and bonuses for employees expected to continue working beyond their minimum notification period before termination.

(2)Amounts reflect estimated severance and other related costs we were contractually required to pay in connection with employees transferred as part of the shared service arrangement entered into with HCL Technologies in the first quarter 2019.

(3)Represents professional support services associated with our business transformation initiatives.

The restructuring related costs reserve as of June 30, 2020 was $46, which is expected to be paid over the next twelve months, as compared to $37 at December 31, 2019.