Restructuring and Other Charges |
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| Restructuring Costs and Asset Impairment Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring and Other Charges |
In the second quarter of 2025, we announced and commenced the 2025 Restructuring Plan, which was subsequently approved and committed to by our management. This initiative is intended to lower expenses, streamline our organizational structure and reduce management layers across functions while reallocating resources toward our core client and server businesses by reducing lower-priority programs and initiatives. Restructuring charges are primarily comprised of employee severance and benefit arrangements, non-cash asset impairment and accelerated depreciation charges resulting from exit activities, as well as impairment charges relating to real estate exits and consolidations. These charges were excluded from our operating segments' results and included as "corporate unallocated expenses" within the restructuring and other charges category presented in "Note 3: Operating Segments" within Notes to Consolidated Financial Statements. The cumulative cost of the 2025 Restructuring Plan as of December 27, 2025 was $2.0 billion. Any changes to our estimates or timing will be reflected in our results of operations in future periods. We expect to recognize total charges of approximately $2.2 billion under the 2025 Restructuring Plan. A substantial majority of actions pursuant to the 2025 Restructuring Plan were completed in the fourth quarter of 2025 with the remainder expected to be completed in 2026.
In the third quarter of 2024, the 2024 Restructuring Plan was announced and a series of cost and capital reduction initiatives were implemented. We have incurred total charges of approximately $3.1 billion under the 2024 Restructuring Plan, which is expected to be completed in 2026.
In the third quarter of 2022, the 2022 Restructuring Program was approved to rebalance our workforce and operations. We have incurred total charges of approximately $1.3 billion under the 2022 Restructuring Program, which was complete in the first quarter of 2024.
Employee severance and benefit arrangements includes net charges relating to the 2025 Restructuring Plan of $1.5 billion and 2024 Restructuring Plan and other actions of $281 million in 2025. Charges accrued as of December 27, 2025 and December 28, 2024, were recorded as current liabilities within accrued compensation and benefits on the Consolidated Balance Sheets.
Restructuring activities related to employee severance and benefit arrangements under the 2025, 2024 and 2022 Restructuring Plans were as follows:
Litigation charges and other includes a $163 million benefit recorded in 2025 from the reduction of the previously accrued EC-imposed fine recorded in 2023. While the fine remains unpaid on appeal, our obligation is guaranteed by a third party. We funded the guarantee in 2025 by depositing $340 million in legally restricted accounts, for which the restricted cash is presented within other long-term assets. The 2024 charges include $780 million arising out of the R2 litigation. In 2023, a $1.2 billion benefit was recorded due to a reduction in a previously accrued charge as a result of developments in the VLSI litigation. The 2023 charges also included a $353 million termination fee in connection with our inability to timely obtain required regulatory approvals needed to acquire Tower in accordance with the contractual terms of the terminated acquisition agreement and a $401 million charge for the original EC-imposed fine. Refer to "Note 19: Commitments and Contingencies" within Notes to Consolidated Financial Statements for further information on the EC fine and VLSI litigation developments. Refer to "Note 19: Commitments and Contingencies" within the 2024 Form 10-K for more information on the R2 litigation.
Asset impairment charges in 2025 primarily included $474 million of non-cash charges associated with the 2025 and 2024 Restructuring Plans resulting from the exit of certain non-core lines of business, recorded within property, plant and equipment, net on the Consolidated Balance Sheets, and $48 million relating to certain leased assets that were recorded within other long-term assets as of December 27, 2025. The asset impairment charges in 2024 included non-cash charges associated with the 2024 Restructuring Plan, including $442 million of non-cash impairments of construction-in-progress assets associated with our decision to exit and outsource manufacturing capabilities for certain internal test hardware; and $103 million of non-cash impairments of operating leased assets and related leasehold improvements resulting from real estate consolidations and exits. Real estate consolidations and exits did not significantly change our operating lease liabilities and may result in future cash outlays for facility restoration or the relocation of operations. These impairments were recorded within property, plant and equipment, net except for the impairment of operating leased assets of $83 million that were recorded within other long-term assets on the Consolidated Balance Sheet as of December 28, 2024.
In addition, we recorded non-cash goodwill impairment charges of $3.0 billion in 2024 (see "Note 11: Goodwill" within Notes to Consolidated Financial Statements). Further, as a result of a decline in the actual and projected undiscounted cash flows for certain acquired intangible assets, we concluded the assets were not recoverable and recognized a non-cash charge of $108 million in 2024.
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