KLA Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Restructuring Charges

Restructuring Charges

3 Months Ended

Sep. 30, 2015

Restructuring and Related Activities [Abstract]

NOTE 13 — RESTRUCTURING CHARGES

The Company has in recent years undertaken a number of cost reduction activities, including workforce reductions, in an effort to lower its ongoing expense run rate. The program in the United States is accounted for in accordance with the authoritative guidance related to compensation for non-retirement post-employment benefits, whereas the programs in the Company’s international locations are accounted for in accordance with the authoritative guidance for contingencies.

During the fourth quarter of fiscal year 2015, we implemented a plan to reduce our global employee workforce to streamline our organization and business processes in response to changing customer requirement in our industry. The goals of this reduction were to enable continued innovation, direct our resources toward our best opportunities and lower our ongoing expense run rate. We substantially completed the global workforce reduction during the three months ended September 30, 2015 and recorded a $7.1 million net restructuring charge, of which $2.8 million was recorded to costs of revenues, $1 million to engineering, research and development expense and $3.3 million to selling, general and administrative expense.

The following table shows the activity primarily related to the accrual for severance and benefits for the three months ended September 30, 2015 and 2014:



	Three months ended September 30,
(In thousands)	2015			2014
Beginning balance	$	24,887		$	2,329
Restructuring costs	7,066			3,881
Adjustments	373			144
Cash payments	(19,265		)	(1,399		)
Ending balance	$	13,061		$	4,955

The accrual for severance and benefits as of September 30, 2015 is expected to be paid out by the end of our fiscal quarter ending December 31, 2015.