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Accrued Expenses and Other Current Liabilities | 6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities as of September 30, 2023 and December 31, 2022 consisted of the following:
On March 14, 2023, Jerry Guo, the Company’s co-founder, President and Chief Executive Officer, announced his retirement from his executive roles effective March 17, 2023. A separation agreement was entered into by Mr. Guo and the Company’s board of directors on March 13, 2023. Pursuant to this agreement, Mr. Guo was entitled to certain termination benefits, including accelerated vesting of stock awards, for which additional stock-based compensation of $1,737 was recognized in the nine months ended September 30, 2023, as discussed in Note 12, Stock-based Compensation, all of which was accrued for during the three months ended March 31, 2023. The agreement also included separation pay, equal to the sum of (i) Mr. Guo's annual base salary at the rate in effect as of March 17, 2023 and (ii) Mr. Guo's target bonus for the calendar year 2023. During the nine months ended September 30, 2023, the Company recorded severance expenses of $2,199 related to Mr. Guo's separation agreement, of which $1,015 is still included in accrued compensation and related taxes in the table above as of September 30, 2023. Total expense recognized as a result of the separation agreement during the nine months ended September 30, 2023 was $3,936, inclusive of severance expense and stock based compensation expense as described above. Reduction in Force In April 2023, the Company approved a plan for a reduction in force. The Company reduced its workforce by 134 employees, representing approximately 13% of the Company's total workforce. Severance payments and other employee-related cost in connection with the reduction in force during the nine months ended September 30, 2023 were classified in the condensed consolidated statements of operations and comprehensive loss as follows:
As of September 30, 2023, substantially all of these severance payments have been paid. Accrued Warranty Substantially all of the Company’s products are covered by warranties for software and hardware for periods ranging from 90 days to two years. In addition, in conjunction with customers’ renewals of maintenance and support contracts, the Company offers an extended warranty for periods typically of to three years for agreed-upon fees. In the event of a failure of a hardware product or software covered by these warranties, the Company must generally repair or replace the software or hardware or, if those remedies are insufficient, and at the discretion of the Company, provide a refund. The Company’s warranty reserve, which is included in accrued expenses and other current liabilities in the condensed consolidated balance sheets, reflects estimated material, labor and other costs related to potential or actual software and hardware warranty claims for which the Company expects to incur an obligation. The Company’s estimates of anticipated rates of warranty claims and the costs associated therewith are primarily based on historical information and future forecasts. The Company periodically assesses the adequacy of the warranty reserve and adjusts the amount as necessary. If the historical data used to calculate the adequacy of the warranty reserve are not indicative of future requirements, additional or reduced warranty reserves may be required. The following table presents a summary of changes in the amount reserved for warranty costs for the nine months ended September 30, 2023 and 2022:
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