Restructuring Charges

9 Months Ended

Jul. 02, 2016

On October 23, 2015, we initiated a plan to restructure our workforce and consolidate select facilities in order to reduce our cost structure and to realign our investments with what we believe to be our higher growth opportunities. The restructuring is expected to result in a charge of $50 million to $70 million, the upper range of which has increased from our original estimate of $50 million. In the first three quarters of 2016, we recorded charges of $37.0 million, $4.4 million and $2.6 million respectively, attributable to termination benefits associated with 518 employees. The majority of the remaining charges are expected to be recorded in the fourth quarter of 2016. Additionally, in the first nine months of 2016, we recorded charges of $0.5 million related to the closure of excess facilities. In the first, second and third quarters of 2016, we made cash disbursements of $16.7 million, $25.1 million and $8.1 million, respectively, associated with restructuring charges.

On April 4, 2015, we committed to a plan to restructure our workforce and consolidate select facilities to realign our global workforce to increase investment in our Internet of Things business and to reduce our cost structure through organizational efficiencies in the face of significant foreign currency depreciation relative to the U.S. Dollar and a more cautious outlook on global macroeconomic conditions. In the second and third quarter of 2015, we recorded charges of $38.5 million and $3.3 million, respectively, attributable to termination benefits associated with 411 employees and in the first nine months of 2015, we recorded charges of $1.1 million related to the closure of excess facilities. In the first, second and third quarters of 2015, we made cash disbursements of $17.3 million, $5.5 million and $25.0 million, respectively, associated with restructuring charges.

Additionally, in the first nine months of 2015, we recorded a credit of $0.3 million related to prior year restructuring actions.

The following table summarizes restructuring accrual activity for the nine months ended July 2, 2016:



	Employee severance and related benefits			Facility closures and related costs			Total
	(in thousands)
October 1, 2015	$	14,086		$	1,168		$	15,254
Charge to operations	44,010			531			44,541
Cash disbursements	(49,059		)	(834		)	(49,893		)
Foreign exchange impact	103			(11		)	92
Accrual, July 2, 2016	$	9,140		$	854		$	9,994

The accrual for facility closures and related costs is included in accrued expenses and other liabilities in the Consolidated Balance Sheets, and the accrual for employee severance and related benefits is included in accrued compensation and benefits in the Consolidated Balance Sheets.