H&R Block said today it is reorganizing its business and cutting hundreds of jobs in a bid to save the company up to $100 million per year by the end of fiscal 2013.
The nation's largest tax preparer, based in Kansas City, also said its revenue and earnings for its fiscal year will fall below Wall Street expectations, in part because of charges related to the restructuring.
In addition, Block said Jeff Brown, its chief financial officer, is resigning and a search for a successor is under way.
Shares plunged more than 16 percent in after-hours trading.
Block will offer severance packages to employees who volunteer to leave, and will lay off workers if it does not reach the goal of eliminating 350 full-time positions. The company also plans to close about 200 underperforming offices.
The cost-cutting strategy will result in a pretax charge for lease termination, severance and related costs of $30 million, or 6 cents per share, for the fiscal fourth quarter ending April 30.
Block is set to report quarterly and full fiscal year results on June 26.
The company now expects fiscal 2012 earnings per share to fall between $1.09 and $1.15, on revenue of approximately $2.9 billion. Analysts, on average, were projecting earnings of $1.40 per share, and revenue of $3.02 billion, according to a FactSet survey.
The moves come after Block shed its ExpressTax business and sold off its RSM McGladrey business consulting unit last year in an attempt to focus on its core tax business.
In addition, on Tuesday Block reached a deal with the U.S. Securities and Exchange Commission to settle charges that its former Option One Mortgage Corp. unit misled investors about subprime mortgage offerings. The unit, now called Sand Canyon Corp., will pay $28.2 million in the deal.
Block also has retained an outside search firm to identify a new chief financial officer. Brown will remain with the company until a successor is named, the company said. Brown, who joined the company in 2002, was named to his post in 2010 amid a string of executive changes.
Philip L. Mazzini, president of retail tax services, is also resigning.
Jason Houseworth was named president of U.S tax services and Amy McAnarney named president of retail client services under the company's new organization, which will see four executives lead U.S. client services. Robert Turtledove remains chief marketing officer and Susan Ehrlich remains president of financial services.
Separately, H&R Block said it processed 22.2 million U.S. tax returns for the tax season that ended this month, a 4.5 percent increase over last year. Online returns grew more than 20 percent, while retail returns rose 1 percent.
The company's preliminary analysis suggests that Block gained a half-percent of the total market for U.S. tax preparation, Cobb said in a statement.
The online increase in particular is significant, because Block has struggled in recent years to compete with other companies' digital tax preparation offerings, in particular Intuit Inc.'s TurboTax.
Block also said it issued 2.9 million prepaid cards during tax season. The company has identified growing its Emerald Card product as a key strategy.
H&R Block shares closed regular trading up 15 cents at $16.74. After the market closed and the plans were announced, the stock plunged $2.74, or 16.4 percent, to $14.