Annual report pursuant to Section 13 and 15(d)

Restructuring

v2.4.1.9
Restructuring
 12 Months Ended
Dec. 27, 2014
Restructuring and Related Activities [Abstract]  
Restructuring
Restructuring
2014 Restructuring Plan
In October 2014, the Company implemented a restructuring plan designed to improve operating efficiencies. The plan involved a reduction of global headcount by approximately 6%, largely completed by the end of 2014, and an alignment of its real estate footprint with its reduced headcount, largely expected to be completed by the end of first half of 2015. The Company recorded a $57 million restructuring charge in the fourth quarter of 2014, which consisted of $44 million for severance and costs related to the continuation of certain employee benefits, $6 million for contract or program termination costs, $1 million for facilities related costs and $6 million for asset impairments, a non-cash charge. In accordance with the restructuring plan, the Company expects to record a restructuring charge of approximately $13 million in 2015, primarily related to real estate actions.
2012 Restructuring Plan
In the fourth quarter of 2012, the Company implemented a restructuring plan designed to improve the Company’s cost structure and to strengthen its competitiveness in core growth areas. The plan primarily involved a workforce reduction of approximately 14% as well as asset impairments and facility consolidations. The Company recorded restructuring expense in the fourth quarter of 2012 of approximately $90 million which was primarily comprised of employee severance. The non-cash portion of the restructuring expense included approximately $4 million of asset impairments. In 2014 and 2013, the Company incurred costs of $3 million and $11 million, respectively, related to facility consolidation and site closures, which were partially offset by the release of employee severance costs of $2 million and $5 million, respectively. The 2012 restructuring plan was largely completed as of the end of the third quarter of 2013.
2011 Restructuring Plan
In 2012, the Company recorded an approximately $8 million for severance and costs related to certain employee benefits. The plan was completed as of the end of the first quarter of 2012.
The following table provides a summary of the restructuring activities during 2014 and 2013 and the related liabilities recorded in “Accrued and other current liabilities” and “Other long-term liabilities” on the Company’s consolidated balance sheets remaining as of December 27, 2014:
 
Severance
and related
benefits
 
Other exit
related
costs
 
Total
 
(In millions)
Balance at December 29, 2012
$
41

 
$
17

 
$
58

Charges (reversals), net
(5
)
 
11

 
6

Cash payments
(33
)
 
(21
)
 
(54
)
Balance at December 28, 2013
3

 
7

 
10

Charges (reversals), net
42

 
16

 
58

Cash payments
(19
)
 
(4
)
 
(23
)
Non-cash charges
—

 
(6
)
 
(6
)
Balance at December 27, 2014
$
26

 
$
13

 
$
39


The following table provides a summary of each major type of cost associated with the 2014, 2012 and 2011 restructuring plans through December 27, 2014:
 
2014
 
2013
 
2012
 
(In millions)
Severance and benefits charges (reversals), net
$
42

 
$
(5
)
 
$
95

Contract or program termination charges
6

 
—

 
—

Asset impairments
6

 
—

 
4

Facility consolidation and closure charges
4

 
11

 
1

Total
$
58

 
$
6

 
$
100

Executive Officer Separation
In the fourth quarter of 2014, the Company recorded other special charges of $13 million. The amount primarily includes $10 million due to the departure of the Company's former CEO, of which $5 million was related to cash and $5 million was related to stock-based compensation expense. The amount is recorded under “Restructuring and other special charges, net” on the consolidated statements of operations.