H&R BLOCK To Close 200 Company Locations, Cut 350 Jobs
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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H&R Block Announces Strategic Realignment of Organization; Preliminary Fiscal 2012 Financial Results
KANSAS CITY, MO, Apr 25, 2012 (MARKETWIRE via COMTEX) — H&R Block, Inc.
- Strategic realignment expected to realize net annualized savings of $85 to $100 million by end of fiscal year 2013
- Company to record fourth quarter pretax charge for lease termination, severance and related costs of approximately $30 million, or $0.06 per share
- Company expects fiscal 2012 total revenues of approximately $2.9 billion and GAAP diluted earnings per share from continuing operations of $1.09 to $1.15
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
ARE YOU FAMILIAR WITH THE H&R BLOCK AND THE H&R BLOCK FRANCHISE OPPORTUNITY? SHARE A COMMENT BELOW.
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.
Mike,
Do you really worry about VITA as your competition. They have always been there and a percentage of the populations has always used them. What you need to worry about is Liberty Tax taking market share from everyone.
Hi Stugotz,
Glad your back.. I am not worried about Liberty, Liberty SUCKS ASSSTREROIDS!! why are we on Blocks board, are you not able to post under Lbiberty? I am glad that you are back to have more fun! Just to let you know I hired the only preparer Liberty has at their corporate store in zzzz city and they don’t have a tax class, I love it!!
I am sure you will be doing real well this tax season, mickey…..
Stu: I will be doing great! Going to give $50 CIF and calling all PRIOR clients, anyway, let’s move back over to the Liberty side, not on Blocks side-for they are such a better company, that is why they don’t have any UNHAPPY FRANCHISEES and Liberty has THOUSANDS!!!
You being Obsessive Compulsive and posting 1000 times???
Looks like Mike, and San Fran, and Bill and Frustrated are the same person posting over and over and over.
I wonder how many stores HR Block will close this year while Liberty Tax keeps adding offices.
Funny how there aren’t ANY, NONE ZERO. NADA UNHAPPY H&R BLOCK franchisees posting on this website but THOUSANDS of comments from current and former Liberty Franchisees, hmm, makes one wonder which is TRULY the better company!!
Mike, there are thousands of comments but they are all your posting with different names….
Guest, you are right, they are all me, but that is still way more than all the ex franchisees on Blocks’ site. You also forget, that I have never been nor ever will be, a Liberty franchisee….
Mike,
Doesn’t that tell you how disturbed you must really be to post so much and not even be a franchisee?
It tells me that you love me, because everytime I post you post as well.
Yes, Mike that is it…. Sounds like your like 12 years old, is that about right?
Sounds to me that you post under Block, because Hewitt has you too scared to post under Liberty.
This post is misleading. The article was written Oct. 2011 and is not news worthy.
bill writes: “This post is misleading. The article was written Oct. 2011 and is not news worthy.”
Not sure what post Bill is referring to, but the earnings announcement above was released Apr 25, 2012, and we published the post the next day. Hence the dateline:
KANSAS CITY, MO, Apr 25, 2012 (MARKETWIRE via COMTEX) — H&R Block, Inc.
I picked up the wrong date. However, my point is the heading is miss leading. It gives the impression that this is happening in 2013 when it actually occurred last year.
As Mike pointed out there are no post from HR Block franchisees to be found on
this forum.
Bill:
The date “April 26, 2012” appears just below the headline. I am not sure how this could be considered misleading.
Are the old newspapers in your garage misleading because the headlines make it seem like they are referring to today rather than two weeks ago?
You are correct about HR Block having very few comments compared to Liberty Tax. Some might claim that HR block franchisees probably can no longer afford Internet access. :)
(It’s a joke).
Looks like HR block will be closing all the Walmart locations from last year. I guess that is a total of about 700 locations?
Gosh, Can’t believe the competition continues to kick our butts….
You better believe it buddy. Liberty Tax is going to continue to grow and is well on pace to being number 1 by 2020.
^^Keep drinking the koolaid, stugotz
By 2020, Hewitt will be in jail. Who cares about the rest of the company?
And none of the Liberty “Zees” are making any money. It’s good to be #1, huh?
Only John John and crony’s are making any money. He just sucks it out of each and every zee. How stupid are we!
Can’t believe HR Block is down 9% in returns while Liberty Tax is up 15%. Seems like Liberty Tax is the way to gol
Unhappy…even though you support liberty and hewitt. . I have to admit..you do make me laugh.
I used to be with Jackson Hewitt. My best friend is with HR Block. They charge 30% royalties and opened a company store right next to his franchisee store. I don’t recommend either one of these companies.
Herb
This company is a Herb. 30% royalties when Liberty is charging 19% and Jackson Hewitt charging 21%. All the good territories are sold and they only make available their struggling stores. I would do Liberty Tax any day of the week over this.
In my opinion if you already have the tax knowledge why choose any of them? The only reason I can think of is branding.
HR 0lock’s name is respected and gives you creditability. It currently prepares about 22% of all paid preparer tax returns.
Jackson Hewitt which went through bankruptcy and based on the advertising done in 2014 compared to past year has apparently cut it’s advertising budget. The company is known mainly in lower income neighborhoods. Currently it has about a 3% share of the market and is 2nd nationally behind HR Block.
Liberty tax service which claims it is the fasting growing tax service currently has 4000 locations compared to HR Block which has 10,000 locations. Despite the fact that it has grown rapidly it is still 3rd behind Jackson Hewitt. The company philosophy is that paid advertising isn’t effective at the corporate level. The key is to us guerrilla marketing. Most of the advertising done at the corporate level is to sell franchises. Another reason for not having any regional or national advertising plan is the company needs to use it’s cash flow to fund operating loans to struggling franchisees. Last year that averaged over $16,000.00 per location. Please see their financials for the year ended 4/30/13.
The fact that HR Block has so few locations available is testament to the quality of it’s operation.
Sounds like an ad for hrblock. Total of 25 to 28 percent leaves 75 percent paid preparer tax returns by independents. Overshadowed by all the talk of franchises. True value independent offices.
Looks like HR Block had a great tax season like Liberty Tax did. So much for this being a dying industry and everyone going to DYI and free from VITA.
http://finance.yahoo.com/news/h-r-block-beats-q4-152942485.html
Because they wised up and let the free returns go to Liberty. ….Don’t liberty zees have to do 200 free returns now?
Tax prep is still a great business. Lots of money to be made with great service and reasonable pricing.
Liberty Tax does free returns during slow times for the community (firefighters, teachers, policemen, nurses, etc). HR Block was doing free returns during peak.
Tell me another business that you can work 4 months out of the year, and make a great living?
Seriously guys. The 200 number is for new offices and anyway it is just an unrealistic goal. Liberty doesn’t actually expect anyone to hit that mark first year. Just like 1000 returns per office is a goal. Most offices don’t do that ever. Just like #1 by 2020 is a goal. Anyone with half a brain knows they won’t pass HRBlock in 6 more years. I mean Liberty has 4k offices Block has 12k.
But still if we even get in the same ballpark as them most Liberty zees will be very very rich. Here are the facts. Liberty has grown by return count (and continues to grow) every year it has been in business. Liberty has grown by revenues every year it has been in business. Yes most of this may be new office openings, but I think they have plenty of room to grow with 4k vs 12k office count.
Is it easy to start in any business. NO If you could choose HRB franchise over Liberty to purchase, of course you would go with Block. But most(successful) Blocks resale for around 1mil. (no virgin territories) You can get an office running for 60k with Liberty. I make tons of money every year with this business. This past year I cleared 175k on gross of 650k. I have alot of room to improve I also feel for the coming years.
My first few years were tough. I did 425 returns my first year (which was actually good I guess I was like #45 on top 75 new offices) I made maybe 10k and I did all the work (probably did 300 of the returns personally) But I have made more and more every year. Second year I made 50k and have only increased every year.
I have seen several come and go. In fact I think it’s safe to say most don’t make it. But in my opinion Liberty is definitely one of the best options available period if you want to enter the retail tax prep industry.
Ed, did Liberty change the rules about the ERC money if you don’t (at the time I was with them get the 100 free returns)? I know those with multiple offices put the free returns under one office so they would get the money because getting 100 returns was hare to do if you were also doing paid returns. So the free return count is not a goal, but in fact (at that time) a requirement!
Mike,
What is your point about these free returns. Are you blaming the fact that you failed on the fact you were forced to do a few free returns? Really?
Free returns are not a requirement. Hope that helps.
John, for me joining liberty and leaving them has been a great blessing. Hewitt is scum and you might be him. I have so much business in other avenues that tax is a small part of the business.
By the way why not just do free returns for everyone in the month of March? I always thought that if x amount that screwitt says you have as retention do them all for free one year and you will be loaded next year. If it was that easy..