Cost Reduction Actions.

In April 2015, in connection with organizational initiatives to create a more competitive cost structure and rebalance the company’s global skill set, the company initiated a plan to incur restructuring charges currently estimated at approximately $300 million through 2017.

During the twelve months ended December 31, 2015, the company recognized charges of $118.5 million in connection with this plan, principally related to a reduction in employees. The charges related to work-force reductions were $78.8 million and were comprised of: (a) a charge of $27.9 million for 700 employees in the U.S. and (b) a charge of $50.9 million for 782 employees outside the U.S. In addition, the company recorded charges of $39.7 million, related to asset impairments ($20.2 million) and other expenses related to the cost reduction effort ($19.5 million). The charges were recorded in the following statement of income classifications: cost of revenue – services, $52.3 million; cost of revenue – technology, $0.3 million; selling, general and administrative expenses, $53.5 million; and research and development expenses, $12.4 million.

During the three months ended September 30, 2016, the company recognized charges of $31.9 million in connection with this plan, principally related to a reduction in employees. The charges related to work-force reductions were $26.5 million, principally related to severance costs, and were comprised of: (a) a charge of $0.5 million for 49 employees in the U.S. and (b) a charge of $26.0 million for 329 employees outside the U.S. In addition, the company recorded charges of $5.4 million, for other expenses related to the cost reduction effort. The net charges were recorded in the following statement of income classifications: cost of revenue – services, $18.0 million; selling, general and administrative expenses, $14.2 million; and research and development expenses, $(0.3) million.

During the nine months ended September 30, 2016, the company recognized charges of $69.0 million in connection with this plan, principally related to a reduction in employees. The charges related to work-force reductions were $54.9 million, principally related to severance costs, and were comprised of: (a) a charge of $5.8 million for 293 employees in the U.S. and (b) a charge of $49.1 million for 928 employees outside the U.S. In addition, the company recorded charges of $14.1 million, for other expenses related to the cost reduction effort. The charges were recorded in the following statement of income classifications: cost of revenue – services, $34.6 million; selling, general and administrative expenses, $33.0 million; and research and development expenses, $1.4 million.

During the three months ended September 30, 2015, the company recognized charges of $17.4 million in connection with this plan. The charges related to work-force reductions were $9.8 million, principally related to severance costs, and were comprised of: (a) a charge of $2.7 million for 176 employees in the U.S. and (b) a charge of $7.1 million for 114 employees outside the U.S. In addition, the company recorded charges of $7.6 million for other expenses related to the cost reduction effort. The charges were recorded in the following statement of income classifications: cost of revenue - services, $7.9 million; cost of revenue - technology, $0.1 million; selling, general and administrative expenses, $8.6 million; and research and development expenses, $0.8 million.

During the nine months ended September 30, 2015, the company recognized charges of $70.0 million in connection with this plan, principally related to a reduction in employees. The charges related to work-force reductions were $52.3 million, principally related to severance costs, and were comprised of: (a) a charge of $28.1 million for 706 employees in the U.S. and (b) a charge of $24.2 million for 527 employees outside the U.S. In addition, the company recorded charges of $17.7 million related to asset impairments and other expenses related to the cost reduction effort. The charges were recorded in the following statement of income classifications: cost of revenue – services, $21.2 million; cost of revenue - technology, $0.2 million; selling, general and administrative expenses, $36.1 million; and research and development expenses, $12.5 million.

A breakdown of the individual components of the work-force reduction costs follows:



	Total			U.S.			Int’l.
Charges for work-force reductions	$	78.8		$	27.9		$	50.9
Payments	(45.3		)	(23.7		)	(21.6		)
Translation adjustments	(0.5		)	—			(0.5		)
Balance at December 31, 2015	33.0			4.2			28.8
Additional provisions	60.3			6.8			53.5
Payments	(49.9		)	(8.2		)	(41.7		)
Changes in estimates and revisions	(5.4		)	(1.0		)	(4.4		)
Translation adjustments	1.2			—			1.2
Balance at September 30, 2016	$	39.2		$	1.8		$	37.4
Expected future payments on balance at September 30, 2016:
2016 remaining three months	$	11.0		$	1.5		$	9.5
Beyond 2016	$	28.2		$	0.3		$	27.9