H&R Block Lays Off 250 as U.S. Tax Return Volumes Fall -- Update
April 26 2016 - 8:29PM
Dow Jones News
By Tess Stynes and Maria Armental
H&R Block Inc. is laying off 250 workers as part of a
broader cost-cutting push following a disappointing tax season.
The Kansas City, Mo., company on Tuesday said it had handled
5.8% fewer U.S. tax returns in the most recent tax season and
planned to restructure operations, including laying off nearly 13%
of its workforce, as part of a "significant cost reduction
effort."
"The volume losses are not acceptable and as CEO, I take
complete responsibility for delivering stronger results," Chief
Executive Bill Cobb said in a prepared statement Tuesday. "You will
see a very different H&R Block in fiscal year 2017."
After the layoffs, the company will have about 1,735 full time
workers, company spokesman Gene King said Tuesday. Mr. King
declined to give specifics on the cost-cutting plans, saying
H&R Block would release additional information when it reports
annual earnings on June 9.
H&R Block's shares fell 7% to $22.14 in recent after-hours
trading.
For the period through April 19, H&R Block said total U.S.
tax return volume fell to 12.2 million, with most of the drop
occurring early in the tax season. Tax returns prepared with its
software fell 2.6%, which the company attributed to rival
companies' price-cutting.
Earlier Tuesday, rival Intuit Inc. raised its guidance for
consumer-tax revenue for the current quarter citing a 15% increase
in online sales of TurboTax through April 24.
Intuit now expects consumer tax revenue to increase 8% to 9% for
the year that ends in July, compared with its earlier guidance for
a 5% to 7% increase.
As part of the changes disclosed Tuesday, H&R Block said it
would realign its field operations and shuffle its management
ranks, including naming company veteran Tony Bowen as its new chief
financial officer starting next month. Mr. Bowen will succeed Greg
Macfarlane, who was named senior vice president and will head the
company's U.S. retail business, which will include greater
involvement in day-to-day operations, Mr. Cobb said.
Write to Tess Stynes at tess.stynes@wsj.com and Maria Armental
at maria.armental@wsj.com
(END) Dow Jones Newswires
April 26, 2016 20:14 ET (00:14 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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