The company expects the changes to cut operating expenses by $140 million to $150 million annually by April 30, 2012, the end of the fiscal year. In a prepared statement, Smyth said the company needs to narrow its focus and invest in a few key initiatives that will have the greatest impact in attract and retaining clients. Block expects to record a pre-tax charge for severance related costs of about $28 million in the first quarter ending July 31.
This action follows the resignation of Becky Shulman, Block's CFO on April 30. Shulman, who walked away with a cash severance of $650,000, had been CFO since March 2008 and was the latest in what has been a substantial change in the list of named executives over the last two years.