We have a company-wide effort underway to re-engineer our cost base. As part of this program, in January 2023, we announced a reduction of our workforce. As a result, total employee severance and related charges recorded during the six months ended June 30, 2023 were $2.0 billion, of which $2.0 billion and $1 million were recorded during the three months ended March 31, 2023 and June 30, 2023, respectively.

In addition, we are taking actions to optimize our global office space. As a result, total charges recorded during the six months ended June 30, 2023 were $633 million, of which $564 million and $69 million were recorded during the three months ended March 31, 2023 and June 30, 2023, respectively. We may incur additional charges in the future as we further evaluate our real estate needs.

These severance and office space charges are included within our consolidated statements of income as follows (in millions):


	Three Months Ended June 30, 2023						Six Months Ended June 30, 2023
	Severance and Related (1)		Office Space		Total		Severance and Related (1)		Office Space		Total
Cost of revenues	$	(1)	$	20	$	19	$	460	$	240	$	700
Research and development	(3)		14		11		832		261		1,093
Sales and marketing	(1)		23		22		444		58		502
General and administrative	6		12		18		259		74		333
Total charges	$	1	$	69	$	70	$	1,995	$	633	$	2,628

(1)Severance includes amounts to be settled in cash, accounted for as one-time involuntary employee termination benefits, and stock based compensation

For segment reporting, the substantial majority of these charges are included within unallocated corporate costs in our segment results.

For the six months ended June 30, 2023, changes in liabilities resulting from the severance charges and related accruals were as follows (in millions):


	Severance and Related
Balance as of December 31, 2022	$	0
Charges(1)	1,566
Cash payments	(1,423)
Balance as of June 30, 2023(2)	$	143

(2)Included in Accrued compensation and benefits on the consolidated balance sheets.