v3.24.2
Restructuring Costs
 6 Months Ended
Jun. 30, 2024
Restructuring and Related Activities [Abstract]  
Restructuring Costs

Note 6 — Restructuring Costs

 

In the fourth quarter of 2021, the Company initiated a three-year ‘Transformation program’ designed to enhance operations, optimize technology and align its real estate footprint to its new ways of working. During the fourth quarter of 2023, we revised the expected costs and savings under the program and we currently expect the program to generate annual cost savings in excess of $450 million by the end of 2024. The program is expected to incur cumulative costs of approximately $1.045 billion and capital expenditures of approximately $130 million, for a total investment of $1.175 billion. The main categories of charges have been in the following four areas:

•
Real estate rationalization — includes costs to align the real estate footprint to the new ways of working (hybrid work) and includes breakage fees and the impairment of right-of-use (‘ROU’) assets and other related leasehold assets.
•
Technology modernization — these charges are incurred in moving to common platforms and technologies, including migrating certain platforms and applications to the cloud. This category includes the impairment of technology assets that are duplicative or no longer revenue-producing, as well as costs for technology investments that do not qualify for capitalization.
•
Process optimization — these costs are incurred in the right-shoring strategy and automation of our operations, which includes optimizing resource deployment and appropriate colleague alignment. These costs include process and organizational design costs, severance and separation-related costs and temporary retention costs.
•
Other — other costs not included above including fees for professional services, other contract terminations not related to the above categories and supplier migration costs.

 

Certain costs under the Transformation program are accounted for under ASC 420, Exit or Disposal Cost Obligation, and are included as restructuring costs in the condensed consolidated statements of comprehensive income. Other costs incurred under the Transformation program are included in transaction and transformation and were $86 million and $205 million during the three and six months ended June 30, 2024, respectively, and $82 million and $127 million during the three and six months ended June 30, 2023, respectively. An analysis of total restructuring costs incurred under the Transformation program by category and by segment and corporate functions, from commencement to June 30, 2024, is as follows:

 

 

 

HWC

 

 

R&B

 

 

Corporate

 

 

Total

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

Real estate rationalization

 

$

—

 

 

$

—

 

 

$

19

 

 

$

19

 

Technology modernization

 

 

—

 

 

 

5

 

 

 

—

 

 

 

5

 

Process optimization

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other

 

 

—

 

 

 

—

 

 

 

2

 

 

 

2

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

Real estate rationalization

 

 

—

 

 

 

—

 

 

 

79

 

 

 

79

 

Technology modernization

 

 

—

 

 

 

3

 

 

 

16

 

 

 

19

 

Process optimization

 

 

1

 

 

 

—

 

 

 

—

 

 

 

1

 

Other

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

Real estate rationalization

 

 

—

 

 

 

—

 

 

 

46

 

 

 

46

 

Technology modernization

 

 

2

 

 

 

5

 

 

 

15

 

 

 

22

 

Process optimization

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

Real estate rationalization

 

 

—

 

 

 

—

 

 

 

21

 

 

 

21

 

Technology modernization

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Process optimization

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

Real estate rationalization

 

 

—

 

 

 

—

 

 

 

165

 

 

 

165

 

Technology modernization

 

 

2

 

 

 

13

 

 

 

31

 

 

 

46

 

Process optimization

 

 

1

 

 

 

—

 

 

 

—

 

 

 

1

 

Other

 

 

—

 

 

 

—

 

 

 

2

 

 

 

2

 

Total

 

$

3

 

 

$

13

 

 

$

198

 

 

$

214

 

 

A rollforward of the liability associated with cash-based charges related to restructuring costs associated with the Transformation program is as follows:

 

 

 

Real estate rationalization

 

 

Technology modernization

 

 

Process optimization

 

 

Other

 

 

Total

 

Balance at October 1, 2021

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Charges incurred

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2

 

 

 

2

 

Cash payments

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1

)

 

 

(1

)

Balance at December 31, 2021

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

1

 

Charges incurred

 

 

27

 

 

 

—

 

 

 

1

 

 

 

—

 

 

 

28

 

Cash payments

 

 

(21

)

 

 

—

 

 

 

(1

)

 

 

(1

)

 

 

(23

)

Balance at December 31, 2022

 

 

6

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

6

 

Charges incurred

 

 

22

 

 

 

8

 

 

 

—

 

 

 

—

 

 

 

30

 

Cash payments

 

 

(25

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(25

)

Balance at December 31, 2023

 

 

3

 

 

 

8

 

 

 

—

 

 

 

—

 

 

 

11

 

Charges incurred

 

 

9

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

9

 

Cash payments

 

 

(12

)

 

 

(4

)

 

 

—

 

 

 

—

 

 

 

(16

)

Balance at June 30, 2024

 

$

—

 

 

$

4

 

 

$

—

 

 

$

—

 

 

$

4