Item 2.05 Costs Associated with Exit or Disposal Activities
On November 3, 2022, the Board of Directors of Zendesk, Inc. ("Zendesk")
approved a plan to reduce Zendesk's current workforce by approximately 300
employees, representing approximately 4.9% of Zendesk's total global workforce.
This decision was based on cost-reduction initiatives intended to reduce
operating expenses and sharpen Zendesk's focus on key growth priorities.
Zendesk currently estimates that it will incur charges of approximately $28
million in connection with the reduction in force, primarily consisting of
severance payments, employee benefits and related costs. Zendesk expects that
approximately $8 million of these charges will be incurred in the fourth quarter
of 2022, and that the reduction in force will be substantially complete by first
quarter of 2023, subject to local law and consultation requirements, which may
extend the process beyond the first quarter of 2023 in certain countries. Of the
total charge, approximately $20 million are expected to be future cash
expenditures. The charges Zendesk expects to incur are subject to assumptions,
including local law requirements, and actual expenses may differ materially from
the estimates disclosed above.
Cautionary Statement Regarding Forward-Looking Statements
This communication includes information that could constitute forward-looking
statements made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995. These statements include those that may be
identified by words such as "will," "intend," "expect," "anticipate," "should,"
"could" and similar expressions. These statements are subject to risks and
uncertainties, and actual results and events could differ materially from what
presently is expected. Factors leading thereto may include, without limitation,
the risks related to the Ukraine conflict or the COVID-19 pandemic on the global
economy and financial markets; the uncertainties relating to the impact of the
Ukraine conflict or the COVID-19 pandemic on Zendesk's business; economic or
other conditions in the markets Zendesk is engaged in; impacts of actions and
behaviors of customers, suppliers and competitors; technological developments,
as well as legal and regulatory rules and processes affecting Zendesk's
business; the timing, receipt and terms and conditions of any required
governmental and regulatory approvals of the proposed acquisition of Zendesk by
an investor group led by Permira Advisers LLC and Hellman & Friedman LLC (the
"proposed transaction") that could reduce anticipated benefits or cause the
parties to abandon the proposed transaction; the occurrence of any event, change
or other circumstance that could give rise to the termination of the merger
agreement entered into pursuant to the proposed transaction; the risk that the
parties to the merger agreement may not be able to satisfy the conditions to the
proposed transaction in a timely manner or at all; risks related to disruption
of management time from ongoing business operations due to the proposed
transaction; the risk that any announcements relating to the proposed
transaction could have adverse effects on the market price of Zendesk's common
stock; the risk of any unexpected costs or expenses resulting from the proposed
transaction; the risk of any litigation relating to the proposed transaction;
the risk that the proposed transaction and its announcement could have an
adverse effect on the ability of Zendesk to retain customers and retain and hire
key personnel and maintain relationships with customers, suppliers, employees,
stockholders and other business relationships and on its operating results and
business generally; the risk the pending proposed transaction could distract
management of Zendesk; and other specific risk factors that are outlined in
Zendesk's disclosure filings and materials, which can be found on
www.zendesk.com, such as its Form 10-K, Form 10-Q and Form 8-K reports that have
been filed with the SEC. Please consult these documents for a more complete
understanding of these risks and uncertainties. This list of factors is not
intended to be exhaustive. Such forward-looking statements only speak as of the
date of these materials, and Zendesk assumes no obligation to update any written
or oral forward-looking statement made by Zendesk or on its behalf as a result
of new information, future events or other factors, except as required by law.
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