In the wake of yesterday’s late announcement of sweeping job cuts and a decreased earnings forecast, shares of tax preparation firm H&R Block (NYSE:HRB) tumbled as much as 16% in Thursday pre-market trading.
The company plans to eliminate 350 workers and shut down about 200 locations across its nationwide chain as part of a “strategic realignment.” It estimates that the layoffs and closures will result in net annualized savings of between $85 million and $100 million by 2013.
Earnings for 2012 were also projected at between $1.09 and $1.15 per share, down significantly from earlier estimates of $1.39 a share, CNNMoney reported.
Additionally, and perhaps due to the company’s worsening financial outlook, H&R Block said Phil Mazzini, president of its retail tax operation would leave the firm. The company said it has initiated a search for a new CFO to replace Jeff Brown, who will become chief accounting and risk officer once a new CFO is found.
Block will incur fourth-quarter, pretax charges of $30 million tied to severance packages for departing workers and closure costs for shut-down offices.