Support.com 2007 Annual Report Download - page 74

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SUPPORTSOFT, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 4. Commitments and Contingencies (Continued)
uncertain, however, and either unfavorable or favorable outcomes could have a material negative impact on our financial condition and operating results.
Regardless of outcome, litigation can have an adverse impact on us because of defense costs, negative publicity, diversion of management resources and other
factors.
Note 5. Restructuring Obligations and Other Charges
In 2007, the Company implemented a reduction in workforce to align its cost structure with anticipated revenue. The Company reduced its workforce by 41
employees, or approximately 12% of its workforce at that time. As a result, the Company recorded a restructuring charge of $1.2 million in 2007. The
restructuring charge was primarily comprised of severance costs and other personnel-related termination costs. Restructuring expenses included in the
Consolidated Statements of Operations were $82,000 for cost of maintenance, $240,000 for cost of services, $160,000 for research and development, $679,000
for sales and marketing and $28,000 for general and administrative. Cash payments of $741,000 were made against those obligations in 2007. The remaining
balance of $577,000 is expected to be paid in the first half of 2008.
In 2006, the Company reduced its workforce by 25 employees, or approximately 10% of its workforce at that time. As a result, the Company recorded a
restructuring charge of $817,000 in 2006. The restructuring charge was comprised of severance costs and other personnel-related termination costs. Restructuring
expenses included in the Consolidated Statements of Operations were $33,000 for cost of maintenance, $163,000 for cost of services, $40,000 for research and
development, $386,000 for sales and marketing and $195,000 for general and administrative.
In 2005, the Company implemented a restructuring that included the termination of 27 employees, or approximately 10% of its workforce at that time, and
closure of various offices worldwide. As a result, the Company recorded a restructuring chares of $645,000 in 2005. All of the employees were terminated as of
December 31, 2005. Restructuring expenses included in the Consolidated Statements of Operations were $76,000 for cost of services, $67,000 for research and
development, $407,000 for sales and marketing and $95,000 for general and administrative.
70
Source: SUPPORTSOFT INC, 10-K, March 13, 2008