Restructuring Charge

What is a 'Restructuring Charge'

A restructuring charge is a one-time cost that must be paid by a company when it reorganizes. A restructuring charge might be incurred in the process of furloughing or laying off employees, closing manufacturing plants, shifting production to a new location or writing off assets. When a company restructures, it is usually experiencing significant problems and restructuring is an attempt to improve the business and recover financially.

BREAKING DOWN 'Restructuring Charge'

A restructuring charge will cost a company money in the short run, but it is meant to save the company money in the long run. A restructuring charge will be mentioned in stock analysis as lowering a company's operating income and diluted earnings. Restructuring charges will often have a significant effect on a company's income statement as a result.