RESTRUCTURING CHARGES, NET

6 Months Ended

Dec. 24, 2023

Restructuring and Related Activities [Abstract]

The Company records employee severance and separation costs that meet the requirements for recognition in accordance with the relevant guidance of ASC 420, Exit or Disposal Cost Obligations, or ASC 712, Compensation - Non-retirement Post-employment Benefits, as applicable. For involuntary termination benefits that are not provided under the terms of an ongoing benefit arrangement, the liability for the current fair value of expected future costs associated with a management-approved restructuring plan is recognized in the period in which the plan is communicated to the employees and the plan is not expected to change significantly. For ongoing benefit arrangements, inclusive of statutory requirements, employee termination costs are accrued when the existing situation or set of circumstances indicates that an obligation has been incurred, it is probable the benefits will be paid, and the amount can be reasonably estimated. Termination benefits associated with employees that elected to voluntarily terminate as part of the restructuring plan are recorded when the employee irrevocably accepts the offer and the amount can be reasonably estimated. If applicable, the Company records such costs into operating expense over the terminated employees’ future service period beyond any minimum or legally required retention period. The majority of restructuring charges that have been incurred but not yet paid are recorded in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets.

In the fiscal year ended June 25, 2023, the Company initiated a restructuring plan designed to better align the Company’s cost structure with its outlook for the economic environment and business opportunities. Under the plan, through December 24, 2023, the Company terminated approximately 1,650 employees, incurring expenses related to employee severance and separation costs. Employee severance and separation costs primarily relate to severance, non-cash severance, including equity award compensation expense, pension and other termination benefits. Additionally, the Company made a strategic decision to relocate certain manufacturing activities to pre-existing facilities and incurred charges to move inventory and equipment and exit selected supplier arrangements.

During the three months ended December 24, 2023, net restructuring costs of $15.0 million and $1.7 million were recorded in restructuring charges, net - cost of goods sold, and restructuring charges, net - operating expenses, respectively, in the Condensed Consolidated Statements of Operations. During the six months ended December 24, 2023, net restructuring costs of $22.9 million and $3.7 million were recorded in restructuring charges, net - cost of goods sold, and restructuring charges, net - operating expenses, respectively. No restructuring charges were recognized during the three and six months ended December 25, 2022.

The restructuring plan is expected to be substantially completed by the June 2024 quarter, and cumulative costs as of December 24, 2023 total $146.9 million.

The following table is a summary of the activity related to the restructuring plan:


	Severance and Benefits		Other		Total
	(in thousands)
Restructuring liability as of June 25, 2023	$	7,989	$	246	$	8,235
Restructuring expense	7,256		19,350		26,606
Cash payments	(12,475)		(11,799)		(24,274)
Non-cash activities	53		(6,923)		(6,870)
Restructuring liability as of December 24, 2023	$	2,823	$	874	$	3,697