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January 22, 2008
H&R Block Inc. may eliminate hundreds of jobs in the next two weeks in a bid to reduce costs and stanch losses at the tax preparation company.
Block has been engaged in an intensive review of expenses since December, and interim Chief Executive Allen Bennett recently notified employees that the company expects to approve cost reduction targets and staff reductions no later than the first part of February.
An internal intranet document obtained by The Kansas City Star sought to answer employee questions about what Block is calling its E3 initiative — the letter “E” standing for excellence, efficiency and engagement.
In the document, Bennett said that the company planned to identify job eliminations this month and notify employees of the changes in February.
In a written statement Tuesday, the company declined to offer specifics but acknowledged the ongoing review of expenses.
“This review is designed to ensure that all of our businesses and support functions have a cost structure that helps the company to compete successfully in the marketplace at a fair return on investment, without weakening our ability to serve more than 20 million tax services and other clients each year,” the statement said.
“Associates have been advised that the review and pending realignment of our cost structure will involve position eliminations. When the outcomes of the realignment are known and communicated to associates, probably by early February, we will then be in a position to communicate externally.”
During the second quarter ending Oct. 31, Block lost $502.3 million compared with a $156.5 million loss during the same period a year ago. The company’s financial problems resulted in the resignation of Chairman and Chief Executive Mark Ernst in November. Board member Richard Breeden replaced him as chairman and named Bennett as interim CEO while the company searches for a permanent replacement.
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