Friday, August 23, 2019

We’ve all seen the press releases time and again: Company ABC discloses tough times in an earnings release, and proposes a sweeping plan that will include X number of dollars in “restructuring charges.”

Well, how much has all that restructuring actually cost over the years?

We’ve examined this issue from time to time, including looks at specific companies and how their costs might change from the start of a restructuring plan (usually three years) to the end. This time around we asked a simpler question: How much have all companies reported in restructuring charges for the last several years?

So we visited our Multi-Company database page and searched all companies that have included a number tagged “Restructuring Charge” over the last six years. The results are below.



As you can see, total restructuring charges have ranged from $25 billion to $45 billion. The trend line (in red) slopes upward, but that looks like it’s due to a bulge in restructuring charges in the middle of the decade rather than any inexorable progression upward.

In Figure 2, below, we have average restructuring charge per filer. Same phenomenon of the trend sloping upward, although the steep drop in charges in 2018 gives us hope.



We won’t know for sure what the bigger trend is until 2019 numbers arrive next spring, but perhaps the bulge in 2016 and 2017 was an aberration.

In total, firms spent $235.68 billion in restructuring charges 2012-18. Who were the biggest spenders? Table 1, below, gives us the Top 10 list.



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