H&R Block Warns Option One Sale Might See Delay; Another Round of Job Cuts

Per the Associated Press, H&R Block said today that it is cutting more employees at its Option One Mortgage unit:

H&R Block Inc. said Thursday it will cut more jobs at its struggling subprime mortgage unit and that the planned sale of the business could be delayed until later in the year. H&R Block did not disclose how many additional jobs would be cut at Option One Mortgage Corp. or the amount of any related charge. In May, the company said it would cut 615 jobs at Option One and record a $19 million pretax charge. In a filing with the Securities and Exchange Commission, the company said the new cuts are likely to come before Dec. 31.

Some idea of the scope of the newest round of layoffs: National Mortgage News is reporting that today’s announced layoffs encompass 185 account executives. Further, Reuters is reporting that there is some possibility that Option One’s sale to Cerberus might be delayed:

In April, H&R Block said it would sell the struggling mortgage unit to an affiliate of private equity firm Cerberus Capital Management LP. On Thursday, the company said it continues to move toward closing the sale by the end of the fiscal quarter ending Oct. 31, but cautioned that the deal might not be completed until sometime in the following quarter. H&R Block didn’t give a reason for the possible delay.

There has been some speculation by industry observers recently that Cerberus’ interest in Option One may be fading, and a delay would certainly fuel that fire.

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