Has the risk of violence become too much?
No, it's actually quite a bit more boring than that - cost savings. The company states that it will decrease its operating expenses $140-$150 million by 2012. CEO Russ Smyth was quoted in the Kansas City Star that "There aren't as many people who need their taxes done when there are a lot fewer W-2s going out," referring to the higher unemployment rate in the company's customer base.
HRB's headquarters in Kansas City will cut 165 of the 400 jobs lost.
The timing of this announcement is interesting because we've heard a few rumors (but virtually no details) about layoffs at RSM McGladrey, an HRB subsidiary, but they aren't as forthcoming with the press releases and aren't returning our calls. If you have any details about layoffs at RSM or its on-again off-again affiliate, McGladrey & Pullen, get in touch with us.
Full HRB press release:
KANSAS CITY, Mo. – H&R Block (NYSE:HRB) today announced a broad strategic realignment of its field and corporate support organization. Overall, the company expects these changes to decrease annual operating expenses by $140 - $150 million per year by the end of fiscal year 2012.
Russ Smyth, president and chief executive officer of H&R Block, said, “We operate in a challenging and competitive environment, and to be successful we must find new ways to provide better value to our clients. This requires that we narrow our focus and invest in a few key initiatives that will have the greatest impact on attracting and retaining clients in our retail and digital channels, while eliminating other activities and their related costs.”
Approximately 400 positions are being eliminated throughout the organization as part of the measure. The company also has closed approximately 400 under-performing tax offices out of its network of 11,000 retail tax locations.
“Changes like these are never easy and we appreciate the hard work and loyalty of the affected associates,” Smyth said.
“However, these steps are necessary to improve our business performance and better serve our clients.”
H&R Block expects to incur a pre-tax charge for severance-related costs of approximately $28 million, most of which will be incurred in the fiscal quarter ending July 31, 2010.