H&R Block, Inc. has announced a “broad strategic realignment,” that includes the elimination of approximately 350 full-time positions throughout its Kansas City headquarters and nationwide field organization, streamline its seasonal workforce and close approximately 200 underperforming company-owned offices.
As part of the realignment, Amy McAnarney has been appointed President of Retail Client Services and “will be squarely focused on driving service delivery of tax and financial services to the company’s 14.9 million U.S. retail clients throughout its nationwide network of more than 10,000 company-owned and franchise offices.”
Recently, McAnarney served as Senior Vice President of Operations Support and Franchise Development where she was accountable for strategy deployment, client experience development, operations support, and the strategy and development of the company’s franchisee network.
How will this “broad strategic realignment” affect H&R Block franchise owners and employees of H&R Block franchisees? Share an opinion below.
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KANSAS CITY, MO, Apr 25, 2012 (MARKETWIRE via COMTEX) — H&R Block, Inc.
H&R Block, Inc. today announced a broad strategic realignment to create a more cohesive end-to-end client experience, to drive better efficiency and accountability throughout the organization, and to align its resources to balance long-term client and revenue growth. Overall, the company expects to realize net annualized savings of $85 to $100 million by the end of fiscal year 2013 as a result of the strategic realignment.
"Following the completion of my first tax season and a strategic review of our organization, we believe this realignment is an important next step in becoming a nimbler, more profitable, and more client-centric company," said Bill Cobb, H&R Block’s President and Chief Executive Officer. "We have settled on a new organizational structure and identified more efficient ways to operate. We believe these actions will allow us to compete more effectively, more quickly respond to our clients’ needs, and invest in our future as we intensify efforts in our core businesses."
As part of the measure, the company is offering a voluntary separation program to eligible employees throughout the organization. The company will review each application for voluntary separation on an individual basis. In the event the company does not achieve the targeted number of separations from the voluntary program, involuntary separations will follow. Overall, the company plans to eliminate approximately 350 full-time positions throughout its Kansas City headquarters and nationwide field organization. The company also will streamline its seasonal workforce and close approximately 200 underperforming company-owned offices.
"We believe offering a voluntary separation program is an important option to reduce our cost structure," added Cobb. "Changes such as these are always difficult and we appreciate the hard work and dedication of all our associates. However, these steps are necessary so we can create a stronger company, invest in our future, and produce greater value for our clients and shareholders."
U.S. Client Services
The company also announced an organizational realignment, including the formation of U.S. Client Services. The four executives leading this unit will all directly report to Cobb.
"It became clear during our strategic review and benchmarking that the model of having separate retail and digital leadership is no longer viable," said Cobb. "Consistent with many other consumer-facing companies who serve clients effectively through both retail and digital offerings, we have taken steps that will enable us to drive a more cohesive end-to-end client experience, and go to market in a seamless fashion for the 22.2 million clients we serve in the U.S. The four executives who will lead U.S. Client Services all have a proven track record of generating strong results, and their leadership, energy and commitment to our clients will serve us well as we continue our work to position the company for long-term revenue and earnings growth."
-- In-line with its philosophy of serving clients anywhere, anyway, and
anyhow they choose to be served, the company will integrate the
strategy, planning and development of all forms of U.S. tax services
under the leadership of Jason Houseworth, who was named President of
U.S Tax Services. Over the past two years, Houseworth has led the
company's digital tax operations to cumulative client growth of 26
percent and an estimated 150 basis points of cumulative share gains in
the digital online category. Houseworth joined H&R Block in 2008
and is credited with founding the company's Client Innovation Lab.
-- Susan Ehrlich, President of Financial Services, will continue to lead
the company's efforts to grow its H&R Block Emerald Prepaid
MasterCard(R) and all other forms of financial services offered to
its retail and digital tax clients. She also will continue to have
direct oversight of H&R Block Bank. Ehrlich joined H&R Block
in 2011 after a 20 year career in key leadership roles to develop and
deliver payment and credit solutions for JP Morgan Chase, Sears
Financial Services, WaMu Card Services (Providian Financial), and
Citibank. Ehrlich has been recognized the past three years by American
Banker magazine as one of the 25 Most Powerful Women in Finance.
-- Amy McAnarney has been appointed President of Retail Client Services
and will be squarely focused on driving service delivery of tax and
financial services to the company's 14.9 million U.S. retail clients
throughout its nationwide network of more than 10,000 company-owned
and franchise offices. She has held numerous executive positions since
joining H&R Block in 1997, including Vice President of Finance and
Vice President of Tax Strategy. Most recently, McAnarney served as
Senior Vice President of Operations Support and Franchise Development
where she was accountable for strategy deployment, client experience
development, operations support, and the strategy and development of
the company's franchisee network. She also founded The Tax
Institute(TM) at H&R Block, which quickly developed into a
leading source for objective insights into tax law, policy and
research.
-- Robert Turtledove, Chief Marketing Officer, will continue to drive the
company's client acquisition, retention and growth across U.S. Client
Services by leading the company's brand, online, field, research and
social marketing strategies. Turtledove joined H&R Block in 2009
after more than 25 years of experience in consumer, brand, retail,
digital and international marketing with some of the world's most
iconic brands such as Pepsi, Pizza Hut, Frito Lay and Unilever.
Phil Mazzini, President of Retail Tax Services, has resigned from the company effective April 30, 2012.
"I am very sorry that Phil has decided to move on, but I understand his desire to take on new challenges. He did a great job leading the growth of our U.S. Retail Tax business over the past two years and we wish him all the best in the future," said Cobb.
Chief Financial Officer
The company also announced it has retained Crist|Kolder Associates to lead the search for a new Chief Financial Officer. The company’s current CFO, Jeff Brown, will remain with the company and continue to serve as CFO during the search for a successor. Once a successor is found, Brown will transition to Chief Accounting and Risk Officer, where he will oversee all aspects of the company’s accounting function and coordinate its enterprise risk management approach.
"I would really like to thank Jeff for stepping into the CFO role 18 months ago during a period of significant change," said Cobb. "Jeff’s profound knowledge and insight into the business has been a valuable resource to H&R Block over the past 10 years. I am very pleased that we are able to continue leveraging his extensive leadership and accounting experience going forward."
Preliminary Fiscal 2012 Financial Results
H&R Block plans to report its fourth quarter and fiscal 2012 results on Tuesday, June 26 after the NYSE market close. The company expects to incur a pretax charge for lease termination, severance and related costs of approximately $30 million, or $0.06 per share, which will be recorded in the fiscal fourth quarter ending April 30. The company expects fiscal 2012 total revenues of approximately $2.9 billion and GAAP diluted earnings from continuing operations of $1.09 to $1.15 per share.
"Over the past year, we have sharpened our strategy, taken steps to resolve outstanding litigation, and shed non-core assets, which detracted focus away from our core businesses and negatively impacted our margins," said Cobb. "These actions, along with today’s realignment resulted in a number of charges in fiscal 2012. We believe we’ve essentially cleared the decks this year to better position us for long-term earnings growth, margin expansion and improved shareholder returns."
About H&R Block
H&R Block, Inc. has prepared more than 575 million tax returns worldwide since 1955, making it the country’s largest tax services provider. In fiscal 2011, H&R Block had annual revenues of nearly $3 billion and prepared more than 24.5 million tax returns worldwide, including Canada and Australia. Tax return preparation services are provided in company-owned and franchise retail tax offices by approximately 100,000 professional tax preparers, and through H&R Block At Home(TM) digital products. H&R Block Bank provides affordable banking products and services. For more information, visit the H&R Block Online Press Center.
SOURCE: H & R Block
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View Comments
Does anyone recommend HR Block franchise or a Jackson Hewitt Franchise? Seems like Liberty Tax keeps gaining market share and these two just keep closing locations. Any thoughts why?
All the tax prep franchise concepts are no longer competitive in the
marketplace.
Simple returns have declined and tax refund loans are no longer the bread and butter of tax prep.
It's a dying business.
Tax prep is not dying, it's changing. The concepts will need to change. IRS will crack down on EIC fraud by default, which equals by holding up the refunds. Mass confusion last season because of slow refunds. Expecting confusion again this season when folks don't get their refunds until March. Expect to have a hard time finding tax preparers because of the exams and jobs are opening up, so fewer people available. Saying goodbye to simple return fees and EIC fees = cash flow problems. Profitable in the future will mean tax expertise. Higher cost to run a tax prep store. No growth potential. Have to steal customers.
Franchisees doing the marketing. Kinda like if my neighbor cuts his grass, I better cut mine to keep our block looking good. We both have a mortgage bigger than the house is worth but maybe if he sells his, I can eventually sell mine. Or at least stay here. We are working together. Bank does'nt care, either way. Franchisees growing the business.
In my area, the moms and pops are growing because they promise 'maximum refund'. Tax prep in every corner or office building. They have also figured out how to market. They are not going away unless the IRS closes them down.
Tax industry is dead unless you are VITA and doing returns for free along with AARP, otherwise good luck. that's why Blocks' stock has been stagnate for several years.
Sorry Mike,
It's alive and well. Just not growing. There is also new business from all the 'do it yourself' returns gone wrong. I would agree that the 'do it yourself' preparers go back to preparing their own return after they get their courage back.
To stay in the tax industry you will need to manage the business. The 'easy money' is gone or going.
I don't think we have to be afraid of VITA and AARP since they have income limits.
Block stock stagnate because of mortgage business and no plan to plug loss of customers.
Guest2,
Last year, the free places did returns with AGI up to 100k, I know this because I called them and shopped them. They prepare all schedules, even E for rentals. It may not be everywhere, but it is out there. I recommend you shop them as well, if you really want to find the truth, not just what the disclaimers say, remember a w-2 with an extra zero means nothing to them.
Not in my area. Also, VIta will not be there for the follow up. I have shopped them. I also monitor the competition. What you can't control are all the new stores that pop up in December. And every year there are more of them. That's why I say no growth. The market is spread to thin. But it is alive and well. Problem is no chance to do over if you have a bad year. Unless you survive to the next year. A franchise has high cost, and you might not make it.
Guest2,
So what is your recommendation? Are you a Block franchisee, tax preparer or are you unrelated to Block?
I am unrelated to Block, but I am in the tax business. My recommendation is to not get into the business if you are not already in or have experience. Push hard on marketing and keep your ears open for a good deal on buying a practice or a store from someone getting out. Don't put all your money in and don't put all your available credit in. Same as any other business.