RESTRUCTURING

In October 2016, the Company announced a restructuring plan to evolve and streamline its operating model and expects to incur charges in connection with employee workforce reductions and early site exits. The majority of charges are expected to be incurred through 2020, range between $1.5 billion to $2.0 billion, and consist of employee termination benefit costs, contract termination costs, accelerated depreciation, impairment charges and other site exit costs. Cash outlays in connection with these actions are expected to be approximately 40% to 50% of the total charges. Charges of approximately $1.1 billion have been recognized for these actions since the announcement including an impairment charge for a small molecule manufacturing operation in Swords, Ireland. Restructuring charges are recognized upon meeting certain criteria, including finalization of committed plans, reliable estimates and discussions with local works councils in certain markets.

Other restructuring charges in addition to the above actions recognized prior were primarily related to specialty care transformation initiatives designed to create a more simplified organization across all functions and geographic markets. In addition, accelerated depreciation and other charges were incurred in connection with the expected early exits of a small molecule manufacturing site in Cruiserath, Ireland and a R&D facility in Wallingford, Connecticut. Refer to “—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements” for further information.

Employee workforce reductions were approximately 900 in 2018, 1,900 in 2017 and 1,100 in 2016.

The following tables summarize the charges and activity related to the restructuring actions:



	Year Ended December 31,
Dollars in Millions	2018		2017		2016
Employee termination costs	$	87	$	267	$	97
Other termination costs	44		26		12
Provision for restructuring	131		293		109
Accelerated depreciation	113		289		72
Asset impairments	16		241		13
Other shutdown costs	8		3		19
Total charges	$	268	$	826	$	213



	Year Ended December 31,
Dollars in Millions	2018		2017		2016
Cost of products sold	$	57	$	149	$	21
Marketing, selling and administrative	1		1		—
Research and development	79		383		83
Other income (net)	131		293		109
Total charges	$	268	$	826	$	213



	Year Ended December 31,
Dollars in Millions	2018			2017			2016
Liability at January 1	$	186		$	114		$	125

Charges	148			319			116
Change in estimates	(17		)	(26		)	(7		)
Provision for restructuring	131			293			109
Foreign currency translation and other	1			18			—
Payments	(219		)	(239		)	(120		)
Liability at December 31	$	99		$	186		$	114