Annual report pursuant to Section 13 and 15(d)

Accrued Expenses and Other Liabilities

Accrued Expenses and Other Liabilities
12 Months Ended
Dec. 31, 2022
Accrued Liabilities, Current [Abstract]  
Accrued Expenses and Other Liabilities Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consisted of the following:

  December 31,
  2022 2021
(in thousands)
Accrued investment manager fees $ 93,788  $ 95,858 
Accrued compensation and related taxes 77,939  97,523 
Accrued professional services 10,762  7,746 
Accrued treasury stock purchases 9,289  — 
Accrued technology 6,393  8,951 
Non-income tax payables 2,548  4,907 
Other accrued expenses 15,813  10,174 
Total accrued expenses and other liabilities $ 216,532  $ 225,159 

Entry into Outsourcing Arrangement and Organizational Realignment

In the fourth quarter of 2022, the Company entered into an outsourcing arrangement with Tata Consultancy Services (“TCS”) to increase operational scale and business agility. Under this agreement, the Company will outsource certain administrative and operational services of the Envestnet Data & Analytics segment located in Bangalore, India. In connection with this agreement, the Company closed its Bangalore office. The agreement became effective in October 2022 and will continue for a period of ten years. In certain circumstances, the Company may terminate certain portions of the agreement, and in doing so, the agreement requires the Company to pay significant termination fees. Additionally, as part of an organizational realignment in the fourth quarter of 2022, the Company entered into separation agreements with a number of employees. This realignment will allow Envestnet to operate more efficiently and prioritize activities and services that will benefit its clients and the future of its business.

In connection with the outsourcing arrangement with TCS and the 2022 organizational realignment, the Company recognized approximately $18.7 million of severance expense in the fourth quarter of 2022. As of December 31, 2022 the Company has accrued approximately $9.0 million in accrued compensation and related taxes. Additionally, as a result of the outsourcing arrangement and related office closure, the Company recognized office closure and other related expenses totaling $0.9 million during the year ended December 31, 2022.