Restructuring Obligations and Other Charges

9 Months Ended

Sep. 30, 2011

Restructuring Obligations and Other Charges [Abstract]

Restructuring Obligations and Other Charges

Note 5. Restructuring Obligations and Other Charges

In the first quarter of 2009, we implemented a reduction in our workforce and closed certain facilities worldwide in order to reduce our ongoing cost structure.  As a result, we recorded a restructuring charge of $896,000 in the first quarter of 2009. The restructuring charge was primarily comprised of employee termination costs, professional services costs and facilities impairment costs.  As of June 30, 2011, we paid in full the balance of this restructuring obligation, and incurred $65,000 incremental facilities restoration costs related to the final obligations of our facility in the United Kingdom.  This expense was recorded in general and administrative.  As of September 30, 2011, there was no remaining balance related to this restructuring obligation.

In the third quarter of 2009, we ceased using a portion of our headquarters office in order to align our facilities usage with our current size.  As a result, we impaired approximately 46% of our Redwood City facility.  We recorded a restructuring charge of approximately $1.3 million in general and administrative, which related to the facility impairment.  As of September 30, 2011, the remaining balance on this restructuring obligation was $294,000, which we expect to pay through 2012.

In the first quarter of 2011, we implemented a reduction in our work-from-home workforce impacting a group with a specialized skill-set.  We reduced our workforce by 21 employees, or less than 1% of our agent headcount. All of the affected employees were terminated as of March 17, 2011.  As a result, we recorded a restructuring charge of $37,000 in cost of services in the first quarter of 2011. As of June 30, 2011, there was no remaining balance related to this restructuring obligation.

In the third quarter of 2011, we undertook a restructuring of our operations in order to reduce our ongoing cost structure.  We reduced our workforce by 8 employees, or less than 1% of our headcount. All of the affected employees were terminated as of September 27, 2011.  As a result, we recorded a restructuring charge of $368,000 in the third quarter of 2011, of which  $55,000 were recorded in cost of services, $310,000 in sales and marketing and $3,000 in general and administrative.  As of September 30, 2011, the remaining balance on this restructuring obligation was $365,000, which we expect to pay during the fourth quarter of 2011.

The following table summarizes activity associated with the restructuring and related expenses incurred as of September 30, 2011 (in thousands):

	Severance(1)			Facilities(2)			Total
Restructuring obligations, December 31, 2010	$	-		$	661		$	661
Restructuring costs incurred in 2011		405			65			470
Cash payments		(40	)		(432	)		(472	)
Restructuring obligations, September 30, 2011	$	365		$	294		$	659

(1) Severance costs include those expenses related to severance pay and related employee benefit obligations.

(2) Facilities costs include obligations under non-cancelable leases for facilities that we are no longer occupy, as well as penalties associated with early terminations of leases and disposal of fixed assets. No sublease income has been included because subleasing is not permitted under the terms of our lease.