H&R Block Inc on Tuesday said it will eliminate 575 jobs at its Option One Mortgage Corp subprime lending unit, on top of 615 job losses announced on May 15. Block expects to incur a $19 million pretax restructuring charge in its current fiscal year in connection with the additional cuts. It said Option One expects to complete the expanded restructuring by Dec. 31.
In April, H&R Block had agreed to sell Option One to private equity firm Cerberus Capital Management LP. On Aug. 30, H&R Block said the sale may fall apart, and that Cerberus might buy just the loan servicing business. Block, the largest U.S. tax preparer, continues to partner with HSBC USA on high interest tax refund anticipation loans which critics say sours the reputation of Block and HSBC.
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