Severance, Restructuring, and Acquisition Integration Activities

12 Months Ended

Dec. 31, 2020

Restructuring and Related Activities [Abstract]

Severance, Restructuring, and Acquisition Integration Activities

Severance, Restructuring, and Acquisition Integration Activities

Cost Reduction Program

During 2019, we began a cost reduction program to improve performance and enhance margins by streamlining the organizational structure and investing in technology to drive productivity. We recognized $4.0 million and $19.6 million of severance and other restructuring costs for this program during 2020 and 2019, respectively. These costs were incurred by both the Enterprise Solutions and Industrial Solutions segments. The cost reduction program is expected to deliver an estimated $60 million reduction in selling, general, and administrative expenses on an annual basis; approximately $40 million of which was realized in 2020, and the full benefit is expected to be materialized in 2021. We also expect to incur incremental costs of approximately $8 million for this program in 2021.

FutureLink, Opterna, and SPC Integration Program

In 2019, we began a restructuring program to integrate FutureLink, Opterna, and SPC with our existing businesses. The restructuring and integration activities were focused on achieving desired cost savings by consolidating existing and acquired facilities and other support functions. We recognized $4.9 million and $6.1 million of severance and other restructuring costs for this program during 2020 and 2019, respectively. These costs were incurred by the Enterprise Solutions segment. We expect to incur incremental costs of approximately $1 million for this program in 2021.

Industrial Manufacturing Footprint Program

In 2016, we began a program to consolidate our manufacturing footprint, which was later completed in 2018. We recognized severance and other restructuring costs of $17.7 million and $66.1 million for this program during 2018 and cumulatively, respectively. The costs were incurred by the Enterprise Solutions and Industrial Solutions segments, as the manufacturing locations involved in the program serve both platforms.

The following table summarizes the costs by segment of the programs described above as well as other immaterial programs and acquisition integration activities: 

	Severance		Other Restructuring and Integration Costs		Total Costs
			(In thousands)
Year Ended December 31, 2020
Enterprise Solutions	$	1,345	$	6,374	$	7,719
Industrial Solutions	1,706		2,833		4,539
Total	$	3,051	$	9,207	$	12,258
Year Ended December 31, 2019
Enterprise Solutions	$	5,018	$	5,790	$	10,808
Industrial Solutions	15,736		—		15,736
Total	$	20,754	$	5,790	$	26,544
Year Ended December 31, 2018
Enterprise Solutions	$	548	$	14,315	$	14,863
Industrial Solutions	240		7,522		7,762
Total	$	788	$	21,837	$	22,625

The other restructuring and integration costs primarily consisted of equipment transfers, costs to consolidate operating and support facilities, retention bonuses, relocation, travel, legal, and other costs. The majority of the other restructuring and integration costs related to these actions were paid as incurred or are payable within the next 60 days.

The following table summarizes the costs of the various programs described above as well as other immaterial programs and acquisition integration activities by financial statement line item in the Consolidated Statement of Operations:

	Years ended December 31,
	2020		2019		2018
	(In thousands)
Cost of sales	$	704	$	3,425	$	17,962
Selling, general and administrative expenses	11,554		23,119		4,546
Research and development expenses	—		—		117
Total	$	12,258	$	26,544	$	22,625

Accrued Severance

The table below sets forth severance activity that occurred for the Cost Reduction Program and SPC, Opterna and FutureLink Integration Program described above. The balances below are included in accrued liabilities (in thousands).

Balance at December 31, 2019	$	19,575
New charges	2,529
Cash payments	(4,483)
Foreign currency translation	(89)
Other adjustments	(4,147)
Balance at March 29, 2020	$	13,385
New charges	4,660
Cash payments	(4,795)
Foreign currency translation	(132)
Other adjustments	(1,420)
Balance at June 28, 2020	$	11,698
New charges	2,060
Cash payments	(3,968)
Foreign currency translation	(156)
Other adjustments	(1,541)
Balance at September 27, 2020	$	8,093
New charges	992
Cash payments	(1,823)
Foreign currency translation	(95)
Other adjustments	(82)
Balance at December 31, 2020	$	7,085

The other adjustments were the result of changes in estimates. We experienced higher than expected voluntary turnover during 2020, and as a result, certain previously approved severance actions were not taken.