Cost Reduction Actions

In 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 2016 and 2015, the company recognized charges in connection with this plan and other costs of $82.1 million and $118.5 million, respectively, principally related to a reduction in employees.

During the three months ended June 30, 2017, the company recognized charges in connection with this plan and other costs of $27.5 million. Charges related to work-force reductions were $24.2 million, principally related to severance costs, and were comprised of: (a) a charge of $4.8 million for 369 employees and $(0.1) million for changes in estimates in the U.S. and (b) a charge of $19.8 million for 301 employees and $(0.3) million for changes in estimates outside the U.S. In addition, the company recorded charges of $3.3 million comprised of $1.9 million for contract amendment and termination costs, $1.6 million for professional fees and other expenses related to the cost reduction effort and $(0.2) million for foreign currency translation gains related to exiting foreign countries. The charges were recorded in the following statement of income classifications: cost of revenue – services, $19.1 million; cost of revenue - technology, $0.4 million; selling, general and administrative expenses, $8.2 million; and other income (expense), net, $(0.2) million.

During the six months ended June 30, 2017, the company recognized charges in connection with this plan and other costs of $52.9 million. Charges related to work-force reductions were $36.7 million, principally related to severance costs, and were comprised of: (a) a charge of $5.3 million for 414 employees and $(0.2) million for changes in estimates in the U.S. and (b) a charge of $24.0 million for 376 employees, $8.2 million for additional benefits provided in 2017 and $(0.6) million for changes in estimates outside the U.S. In addition, the company recorded charges of $16.2 million comprised of $2.9 million for idle leased facilities costs, $5.2 million for contract amendment and termination costs, $3.0 million for professional fees and other expenses related to the cost reduction effort and $5.1 million for foreign currency translation losses related to exiting foreign countries. The charges were recorded in the following statement of income classifications: cost of revenue – services, $27.6 million; cost of revenue - technology, $0.4 million; selling, general and administrative expenses, $19.5 million; research and development expenses, $0.3 million; and other income (expense), net, $5.1 million.

During the three months ended June 30, 2016, the company recognized charges of $10.2 million in connection with this plan, principally related to a reduction in employees. The charges related to work-force reductions were $6.5 million, principally related to severance costs, and were comprised of: (a) a charge of $1.2 million for 69 employees in the U.S. and (b) a charge of $5.3 million for 262 employees outside the U.S. In addition, the company recorded charges of $3.7 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, $5.1 million; selling, general and administrative expenses, $5.5 million; and research and development expenses, $(0.4) million.

During the six months ended June 30, 2016, the company recognized charges of $37.1 million in connection with this plan, principally related to a reduction in employees. The charges related to work-force reductions were $28.6 million, principally related to severance costs, and were comprised of: (a) a charge of $5.4 million for 244 employees in the U.S. and (b) a charge of $23.2 million for 599 employees outside the U.S. In addition, the company recorded charges of $8.5 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, $16.6 million; selling, general and administrative expenses, $18.8 million; and research and development expenses, $1.7 million.

Liabilities and expected future payments related to these costs are as follows:



				Work-Force Reductions						Idle Leased Facilities Costs
	Total			U.S.			Int’l.			Idle Leased Facilities Costs
Balance at December 31, 2016	$	36.6		$	1.8		$	33.4		$	1.4
Additional provisions	40.4			5.3			32.2			2.9
Payments	(12.9		)	(1.7		)	(10.5		)	(0.7		)
Changes in estimates	(0.8		)	(0.2		)	(0.6		)	—
Translation adjustments	3.9			—			3.7			0.2
Balance at June 30, 2017	$	67.2		$	5.2		$	58.2		$	3.8
Expected future utilization on balance at June 30, 2017:
2017 remaining six months	$	29.3		$	5.2		$	23.3		$	0.8
Beyond 2017	37.9			—			34.9			3.0