8. RESTRUCTURING

The Company reviews its business, manages costs and aligns resources with market demand and in conjunction with various acquisitions. As a result, the Company has taken several actions to reduce fixed costs, eliminate redundancies, strengthen operational focus and better position itself to respond to market pressures or unfavorable economic conditions.

Phase II Business Transformation

During the fiscal year ended January 31, 2011, the Company commenced certain initiatives to improve its cash position, including a plan to restructure the operations of Comverse with a view towards aligning operating costs and expenses with anticipated revenue. Comverse implemented the first phase of such plan during the fiscal year ended January 31, 2011, reducing its annualized operating costs. During the three months ended April 30, 2011, Comverse commenced the implementation of a second phase of measures (the "Phase II Business Transformation") that focuses on process reengineering to maximize business performance, productivity and operational efficiency. As part of the Phase II Business Transformation, Comverse is in the process of creating new business units (BSS, VAS, Mobile Internet and Global Services) that are designed to improve operational efficiency and business performance. One of the primary purposes of the Phase II Business Transformation is to solidify Comverse's leadership in BSS and leverage the growth in mobile data usage, while maintaining its leadership in VAS. In relation to the Phase II Business Transformation, Comverse recorded severance-related costs of $4.5 million during the three months ended April 30, 2011, of which $3.8 million were paid during such fiscal period with the remaining costs of $0.7 million expected to be substantially paid by January 31, 2012. The Company is currently in the process of evaluating the total cost of the Phase II Business Transformation which may result in additional charges.

The rollforward of the workforce reduction and restructuring activities under various plans is presented below:


	Netcentrex 2010 Initiative					Comverse Third Quarter 2010 Initiative ⁽¹⁾						Comverse First Quarter 2010 Initiative						Pre 2010 initiatives
	Severance Related			Facilities Related		Severance Related			Facilities Related			Severance Related			Facilities Related			Severance Related			Facilities Related			Total
	(In thousands)
For the Three Months Ended April 30, 2011
January 31, 2011	$	2,910		$	—	$	2,462		$	86		$	6		$	94		$	227		$	29		$	5,814

Charges		6,591			—		4,505			—			—			—			48			57			11,201
Change in assumptions		—			—		(114	)		—			(3	)		—			1			2			(114	)
Translation adjustments		702			—		—			—			—			—			—			—			702
Paid or utilized		(3,546	)		—		(5,018	)		(51	)		—			(72	)		(48	)		(72	)		(8,807	)


April 30, 2011	$	6,657		$	—	$	1,835		$	35		$	3		$	22		$	228		$	16		$	8,796


	Comverse First Quarter 2010 Initiative						Pre 2010 Initiatives						Verint Initiatives
	Severance Related			Facilities Related			Severance Related			Facilities Related			Severance Related			Facilities Related		Total
	(In thousands)
For the Three Months Ended April 30, 2010
January 31, 2010	$	—		$	—		$	699		$	4,487		$	116		$	—	$	5,302

Charges		5,505			277			5			169			—			—		5,956
Change in assumptions		—			—			—			—			—			—		—
Paid or utilized		(4,330	)		(209	)		(320	)		(1,482	)		(116	)		—		(6,457	)


April 30, 2010	$	1,175		$	68		$	384		$	3,174		$	—		$	—	$	4,801

(1)	Includes costs and payments associated with the Phase II Business Transformation.