H&R Block Lays Off 250 as U.S. Tax Return Volumes Fall -- Update

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 [e-mail] and Maria Armental at [e-mail]

(END) Dow Jones Newswires

April 26, 2016 20:14 ET (00:14 GMT)

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