Personalis Inc

Note 9. Restructuringand Other Charges

Costs related to the Company's reductions in workforce and closure of its China operations are included within Restructuring and Other Charges in the consolidated statements of operations.

Restructuring

In January 2023, the Company initiated a reduction in workforce to reduce operating costs and improve operating efficiency. The workforce reduction affected approximately 100 employees and was substantially completed during the first quarter of 2023. The Company recognized $3.1 million in one-time employee termination benefits in the first quarter of 2023 in connection with the reduction in workforce, comprising separation pay and healthcare benefits payable in cash, all of which were paid by the end of the second quarter of 2023.

In December 2023, the Company initiated a second reduction in workforce to further reduce operating costs and improve operating efficiency. The workforce reduction affected approximately 60 employees and was completed during thefirst quarter of 2024. The Company recognized $4.0 million in one-time employee termination benefits in the fourth quarter of 2023 in connection with the reduction in workforce, comprising separation pay and healthcare benefits payable in cash. Substantially all of such termination benefits were paid by the end of the first quarter of 2024. The Company does not expect to incur any material additional costs in connection with the reductions in workforce.

Closure of China Operations

During the first half of 2023, the Company terminated its operations in China with the objective of streamlining international operations and reducing operating costs. The disposal did not qualify for reporting as a discontinued operation because it did not represent a strategic shift that has or will have a major effect on our operations and financial results. The Company completed the process of dissolving the Personalis (Shanghai) Ltd entity in February 2024.

Expenses of $0.9 million were recognized in the first quarter of 2023 in connection with closure activities, of which $0.3 million was related to one-time employee termination benefits for the Company's 12 former employees located in China and were payable in cash. Substantially all of the terminations were completed during the first quarter of 2023, along with the related cash outlays. The remaining $0.6 million in expenses were comprised primarily of noncash charges, including losses on disposal of fixed assets and impairments of other assets.