Restructuring Obligations and Other Charges

12 Months Ended

Dec. 31, 2012

Restructuring Obligations and Other Charges [Abstract]

Restructuring Obligations and Other Charges

Note 7. Restructuring Obligations and Other Charges

In the third quarter of 2009, we ceased using a portion of our headquarters office in order to align our facilities usage with our size.  As a result, we impaired approximately 46% of our Redwood City facility and  recorded a restructuring charge of approximately $1.3 million, which was included in general and administrative expenses in our consolidated statement of operations for the year ended December 31, 2009. The lease of our previous headquarters office expired on July 31, 2012.  As of December 31, 2012, all amounts relating to the impairment of the previous headquarters office have been paid.

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 4% 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 for cost of services in the first quarter of 2011. As of December 31, 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 eight 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 was recorded in cost of services, $310,000 in sales and marketing and $3,000 in general and administrative. As of December 31, 2011, the remaining balance on this restructuring obligation was $2,000, which we paid during the first quarter of 2012.

In the second quarter of 2012, we initiated a phased reduction in our sales agent workforce.  These selling activities were transitioned to either partner sales centers or third-party sales specialists.  We reduced our workforce by 190 employees, or approximately 15% of our total employee headcount as of the end of the second quarter of 2012.  All of the affected employees were terminated by June 30, 2012.  As a result, we recorded a restructuring charge of $142,000 in sales and marketing expense and $30,000 in general and administrative expense in the second quarter of 2012. The restructuring charge was primarily comprised of employee termination costs and professional services. As of December 31, 2012, all amounts relating to the reduction in sales agent workforce have been paid.

The following table summarizes activity associated with the restructuring obligation (see also Note 8) and related expenses incurred for the years ended December 31, 2012 and 2011 (in thousands):

	Severance(1)			Facilities(2) (3)			Total
Restructuring obligations, December 31, 2010	$	—		$	661		$	661
Restructuring costs incurred		405			65			470
Cash payments		(403	)		(518	)		(921	)
Restructuring obligations, December 31, 2011		2			208			210
Restructuring costs incurred		172			—			172
Cash payments		(174	)		(208	)		(382	)
Restructuring obligations, December 31, 2012	$	—		$	—		$	—

(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 will no longer occupy, as well as penalties associated with early terminations of leases and disposal of fixed assets. No sublease income has been included.

(3) As part of the restructuring costs included in the table above, the Company wrote-off fixed assets related to the facilities that it will no longer occupy. This was a non-cash charge.