Kansas City-based H&R Block on Tuesday reported a disappointing tax season and 250 layoffs.
The company expects a 2016 revenue decline compared with 2015, based on a lower volume of tax returns prepared by the company. It declined to offer details of its just-completed tax season, promising its full year report on June 9.
Block said it handled 4.6 percent fewer tax returns this season across all parts of its business, from the retail outlets it owns and those operated by franchisers to the desktop software and online services it provides in its digital business.
In all, Block said it handled 19.59 million tax returns in the just-completed tax season, compared with 20.52 million a year ago.
The company said it undertook the layoffs in Kansas City and at its field locations across the United States. Affected employees, which equaled 12.6 percent of its workforce, were notified Tuesday.
News of the layoffs came the same day that Overland Park-based Waddell & Reed Financial said a decline in its business led it to shed 10 percent of its workforce through a voluntary separation program and layoffs.
H&R Block chief executive Bill Cobb said the company’s disappointing results came largely in the early part of the tax season. He vowed to be aggressive in attracting business next tax season.
“I believe in the future of H&R Block and, as you will hear from me on June 9th, this season does not change our long-term outlook for the company. We are focused on developing an aggressive 2017 program to appeal to a broad segment of tax preparation clients,” Cobb said in the company’s announcement.
In response to the business slowdown, Block said it is realigning field operations and beginning a “significant cost reduction effort.”
Tuesday’s changes include a shuffling of responsibilities for Block’s retail operations and products, which covers its chain of stores that provide tax preparation help to consumers.
Chief financial officer Greg Macfarlane was named senior vice president of the company’s U.S. retail operations, covering all stores and products on the retail side, such as Tax Identity Shield and Emerald Card. Kip Knight, who had been in charge of retail operations, now heads the franchise operations in the United States as well as Block offices in Canada and Australia.
H&R Block promoted vice president Karen Orosco to senior vice president overseeing sales and services in the retail operations. She had reported to Knight and now, like Knight and Macfarlane, will report to Cobb.
A year ago at this time, the company reported 90 staff cuts, mostly at its Kansas City headquarters, a result of business being down early in that year’s tax season. It had 2,200 full-time employees at the end of tax season a year ago. This round of layoffs leaves it with 1,735 full-time employees.
In 2012, H&R Block similarly sought to cut costs following the tax season though it had handled a then-record 22.2 million tax returns. Its cutbacks then eliminated 350 jobs and closed 200 tax stores.