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 improve its cash position, reduce fixed costs, eliminate redundancies, strengthen operational focus and better position itself to respond to market pressures or unfavorable economic conditions.

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 nine months ended October 31, 2011, Comverse implemented 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 restructured its operations into new business units 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 leading market position in VAS and implementing further cost savings through operational efficiencies and strategic focus. In relation to these restructuring plans, the Company recorded severance and facilities-related costs of $7.5 million during the nine months ended October 31, 2011. Severance and facilities-related costs of $8.8 million were paid during the nine months ended October 31, 2011 with the remaining costs of $1.1 million expected to be substantially paid by January 31, 2012. The Company is currently in the process of evaluating the implementation of certain measures as part of the Phase II Business Transformation which may result in additional charges and, accordingly, the total cost thereof cannot be currently estimated.

Netcentrex 2010 Initiative

During the fiscal year ended January 31, 2011, Comverse's management, as part of initiatives to improve focus on its core business and to maintain its ability to face intense competitive pressures in its markets, began pursuing a wind down of the Netcentrex business. In connection with the wind down, Comverse's management approved the first phase of a restructuring plan to eliminate staff positions primarily located in France. During the nine months ended October 31, 2011, Comverse began the second phase of its Netcentrex restructuring plan. In relation to these initiatives, the Company recorded severance-related costs of $7.1 million and paid $6.2 million of such costs during the nine months ended on October 31, 2011. The remaining costs of $4.0 million relating to the Netcentrex second phase are expected to be substantially paid by January 31, 2012. As an alternative to a wind down, management continues to evaluate restructuring options for the Netcentrex business.

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


	Netcentrex 2010 Initiative					Comverse Third Quarter 2010 Initiative						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 Nine Months Ended October 31, 2011
January 31, 2011	$	2,910		$	—	$	2,462		$	86		$	6		$	94		$	227		$	29		$	5,814
Charges		7,117			—		7,359			179			16			13			274			82			15,040
Change in assumptions		(12	)		—		(140	)		—			(3	)		—			1			2			(152	)
Translation adjustments		265			—		—			—			—			—			—			—			265
Paid or utilized		(6,245	)		—		(8,602	)		(240	)		(19	)		(107	)		(502	)		(113	)		(15,828	)

October 31, 2011	$	4,035		$	—	$	1,079		$	25		$	—		$	—		$	—		$	—		$	5,139


	Netcentrex 2010 Initiative				Comverse Third Quarter 2010 Initiative					Comverse First Quarter 2010 Initiative						Pre 2010 initiatives						Verint Initiatives
	Severance Related		Facilities Related		Severance Related			Facilities Related		Severance Related			Facilities Related			Severance Related			Facilities Related			Severance Related			Facilities Related		Total
	(In thousands)
For the Nine Months Ended October 31, 2010
January 31, 2010	$	—	$	—	$	—		$	—	$	—		$	—		$	699		$	4,487		$	116		$	—	$	5,302
Charges		10,098		—		11,323			191		6,004			1,007			17			246			—			—		28,886
Change in assumptions		—		—		—			—		—			—			(110	)		—			—			—		(110	)
Paid or utilized		29		—		(2,532	)		—		(5,897	)		(804	)		(366	)		(3,820	)		(116	)		—		(13,506	)

October 31, 2010	$	10,127	$	—	$	8,791		$	191	$	107		$	203		$	240		$	913		$	—		$	—	$	20,572