Company Restructuring

6 Months Ended

Jun. 30, 2021

Restructuring and Related Activities [Abstract]


Note 12			Company Restructuring

The Company undertakes various programs to reduce expenses. These programs generally involve a reduction in staffing levels, and in certain cases, office closures. Restructuring and related charges primarily include the following costs related to these programs:

•Employee - severance and relocation benefits

•Exit - contract termination penalties

The expenses related to these activities are included in the Condensed Consolidated Statements of Operations as restructuring and related charges and totaled $71 million and $13 million during the three months ended June 30, 2021 and 2020, respectively, and $122 million and $17 million during the six months

ended June 30, 2021 and 2020, respectively.

Restructuring expenses during the second quarter and first six months of 2021 are primarily due to the future work environment and Transformative Growth to optimize and simplify the Company’s operating model and cost structure. The estimated cost of the remaining Transformative Growth actions announced in the third quarter of 2020 was reduced by $40 million as of June 30, 2021, primarily due to lower severance costs due to attrition. The Company continues to identify ways to improve operating efficiency and reduce cost which may result in additional restructuring charges in the future.


Restructuring programs
($ in millions)	Future work environment		Transformative Growth
Expected program charges	$	110	$	290
2020 expenses	—		(238)
2021 expenses	(79)		1
Change in estimated program costs	—		(40)
Remaining program charges	$	31	$	13

These charges are primarily recorded in the Allstate Protection segment. The Company expects that a majority of these actions will be completed in 2021.

Employee costs, which primarily relate to Transformative Growth, include severance and employee benefits primarily impacting claims, sales, service and support functions. Exit costs related to future work environment and Transformative Growth reflect real estate costs primarily related to accelerated amortization of right of use assets and related leasehold improvements at facilities to be vacated.


Restructuring activity during the period
($ in millions)	Employee costs		Exit costs		Total liability
Restructuring liability as of December 31, 2020	$	72	$	—	$	72
Expense incurred	50		95		145
Adjustments to liability	(23)		—		(23)
Payments and non-cash charges	(35)		(95)		(130)
Restructuring liability as of June 30, 2021	$	64	$	—	$	64

As of June 30, 2021, the cumulative amount incurred to date for active programs related to employee severance, relocation benefits and exit expenses totaled $249 million for employee costs and $147 million for exit costs.