WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES

12 Months Ended

Mar. 31, 2026

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES.

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES

NOTE 18. WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES

On May 5, 2026, the Company approved, as part of its ongoing efforts to further streamline operations, workforce rebalancing actions to optimize and support the Company’s financial and operational efficiency in fiscal year 2027. As a result of these actions, the Company expects to incur workforce rebalancing charges of approximately $200 million, primarily consisting of future cash expenditures for severance and related benefits. Management expects that such workforce rebalancing efforts, once completed, will reduce operating expense in fiscal year 2028. There can be no guarantee that the Company will achieve its expected costs savings.

The Company will continue to seek opportunities to improve operational efficiency and reduce costs, which may result in additional charges in future periods.

During the year ended March 31, 2026, the Company initiated actions to reduce our overall cost structure and increase our operating efficiency which continued through the end of the fiscal year 2026. These actions resulted in workforce rebalancing charges (the “Fiscal 2026 Program”) of approximately $60 million.

During the year ended March 31, 2025, the Company initiated actions to reduce our overall cost structure and increase our operating efficiency which continued through the end of the 2025 fiscal year. These actions resulted in workforce rebalancing charges and charges related to ceasing to use leased and owned fixed assets (collectively, the “Fiscal 2025 Program”). The total charges incurred related to the Fiscal 2025 Program were $162 million, consisting of $114 million in workforce rebalancing charges and $48 million in charges related to ceasing to use leased and owned

fixed assets. The Company expects that these actions will reduce future payroll costs, rent expenses and depreciation of property and equipment.

During the year ended March 31, 2023, the Company initiated actions to reduce our overall cost structure and increase our operating efficiency, which continued through the year ended March 31, 2024. These actions resulted in workforce rebalancing charges, charges related to ceasing to use leased and owned fixed assets, and lease termination charges (collectively, the “Fiscal 2024 Program”). The total charges incurred related to the Fiscal 2024 Program were $310 million, consisting of approximately 60% for workforce rebalancing charges and approximately 40% for charges related to ceasing to use leased and owned fixed assets and lease termination charges. The Company expects that these actions will reduce future payroll costs, rent expenses and depreciation of property and equipment.

The following table presents the segment breakout of charges incurred during the years ended March 31, 2026, 2025 and 2024.


											Costs Incurred to Date
		Year Ended March 31,									Fiscal 2026			Fiscal 2025			Fiscal 2024
(Dollars in millions)		2026			2025			2024*			Program			Program			Program
United States		$	20		$	62		$	29		$	20		$	62		$	43
Japan			5			12			2			5			12			4
Principal Markets			15			30			69			15			30			128
Strategic Markets			20			58			71			20			58			122
Sub-total		$	60		$	162		$	171		$	60		$	162		$	297
Corporate and other			—			—			3			—			—			13
Total charges		$	60		$	162		$	174		$	60		$	162		$	310

*

Effective June 1, 2024, the Company made a minor change to its geographic reportable segments to reflect how it manages its operations and measures business performance, transitioning the reporting and management of its operations in Australia/New Zealand from the Principal Markets segment to the Strategic Markets segment. Historical fiscal 2024 segment information was recast to reflect this change in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025.

The following table presents the classification of workforce rebalancing and site-rationalization activities in the Consolidated Income Statement during the years ended March 31, 2026, 2025 and 2024.


												Costs Incurred to Date
		Year Ended March 31,										Fiscal 2026			Fiscal 2025			Fiscal 2024
(Dollars in millions)		2026			2025			2024				Program			Program			Program
Cost of services		$	—		$	45		$	23			$	—		$	45		$	94
Selling, general and administrative expenses			—			3			16				—			3			25
Workforce rebalancing charges			60			114			135	*			60			114			190
Total charges		$	60		$	162		$	174			$	60		$	162		$	310

*	Excludes $4 million liability adjustment related to workforce rebalancing actions taken by the former Parent prior to Separation.

The following table presents the components of and changes in our liabilities related to workforce rebalancing and site-rationalization activities during the years ended March 31, 2026, 2025 and 2024.


					Liabilities			Liabilities			Liabilities
		Workforce			Related to			Related to			Related to
		Rebalancing			Ceasing to Use			Lease			Ceasing to Use
(Dollars in millions)		Liabilities*			Leased Assets			Terminations			Fixed Assets			Total
Fiscal 2024 Program
Balance at March 31, 2023		$	55		$	—		$	3		$	—		$	58
Charges (benefits)			135			14			(1)			26			174
Cash payments			(161)			—			(2)			(5)			(168)
Non-cash adjustments			(1)			(14)			—			(21)			(36)
Balance at March 31, 2024		$	28		$	—		$	—		$	—		$	28
Cash payments			(25)			—			—			—			(25)
Non-cash adjustments			(3)			—			—			—			(3)
Balance at March 31, 2025		$	—		$	—		$	—		$	—		$	—

Fiscal 2025 Program
Balance at March 31, 2024		$	—		$	—		$	—		$	—		$	—
Charges			114			39			—			8			162
Cash payments			(100)			—			—			—			(100)
Non-cash adjustments			2			(39)			—			(8)			(46)
Balance at March 31, 2025		$	16		$	—		$	—		$	—		$	16
Cash payments			(16)			—			—			—			(16)
Balance at March 31, 2026		$	—		$	—		$	—		$	—		$	—

Fiscal 2026 Program
Balance at March 31, 2025		$	—		$	—		$	—		$	—		$	—
Charges			60			—			—			—			60
Cash payments			(56)			—			—			—			(56)
Non-cash adjustments			1			—			—			—			1
Balance at March 31, 2026		$	4		$	—		$	—		$	—		$	4

*

Balance as of March 31, 2023 excludes workforce rebalancing liabilities inherited from the former Parent of $42 million, charges of $4 million related to one-off terminations, cash payments of $15 million and ending balance of $29 million as of March 31, 2024. The Fiscal 2025 Program balance excludes cash payments of $14 million, non-cash adjustments of $1 million and ending balance of $16 million as of March 31, 2025 related to actions initiated by the former Parent, and current-year movement excludes cash payments of $7 million, non-cash adjustment of ($1) million and ending balance of $10 million related to actions initiated by our former Parent. Workforce rebalancing liabilities are recorded within Other Liabilities; refer to Note 13 – Other Liabilities for further details.