WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES

12 Months Ended

Mar. 31, 2023

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES.

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES

NOTE 19. WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES

During the year ended March 31, 2023, management initiated actions to reduce our overall cost structure and increase our operating efficiency. These actions gave rise to workforce rebalancing charges, charges related to ceasing to use leased and owned fixed assets, and lease termination charges. We expect the total charges to be incurred for this program to be approximately $270 million, consisting of $150 million in workforce rebalancing charges and $120 million in charges related to ceasing to use leased and owned fixed assets and lease termination charges. The Company expects that these actions will reduce future payroll costs, rent expenses and depreciation of property and equipment. We will continue to seek opportunities to improve operational efficiency and reduce costs, which may result in additional charges in future periods.

The following table presents the segment breakout of charges incurred during the year ended March 31, 2023.

	Year Ended
(Dollars in millions)	March 31, 2023
United States	$	14
Japan		2
Principal Markets		63
Strategic Markets		47
Total charges by segment	$	125
Corporate charges not allocated to the segments		10
Total charges	$	135

The following table presents the classification of workforce rebalancing and site-rationalization activity in the Consolidated Income Statement during the year ended March 31, 2023.

	Year Ended
(Dollars in millions)	March 31, 2023
Cost of services	$	71
Selling, general and administrative expenses		9
Workforce rebalancing charges (benefits)		55
Total charges	$	135

The following table presents the components of and changes in our workforce rebalancing and site-rationalization charges accrual during the year ended March 31, 2023.

			Charges		Charges		Abandonment
	Workforce		Related to		Related to		of Certain
	Rebalancing		Ceasing to Use		Lease		Company-owned
(Dollars in millions)	Charges*		Leased Assets		Terminations		Fixed Assets		Total
Balance at March 31, 2022	$	—	$	—	$	—	$	—	$	—
Charges		55		69		4		7		135
Cash payments		—		—		(1)		—		(1)
Non-cash adjustments		—		(69)		—		(7)		(76)
Balance at March 31, 2023	$	55	$	—	$	3	$	—	$	58

* Excludes workforce rebalancing liabilities inherited from the former Parent of $57 million as of March 31, 2022, charges of $16 million related to one-off terminations, cash payments of $32 million, and ending balance of $42 million as of March 31, 2023. Workforce rebalancing liabilities are recorded within Other Liabilities; refer to Note 12 – Other Liabilities for further details.