Restructuring costs

Restructuring costs are expenses a company takes when it reorganizes its business, such as severance pay for laid off staff, closing factories or offices, or ending contracts early.

Companies often report them separately and exclude them from adjusted earnings, arguing they are one time costs that don't reflect the ongoing business. Some of the cost is cash, like severance, and some is not, like writing down equipment at a closed site.

A single restructuring can set a company up for lower costs later. But when restructuring charges show up year after year, they are part of the normal cost of running the business, and adjusted earnings that leave them out will overstate profit.