H&R Block to trim Option One workforce before sale

H&R Block Inc. will eliminate 615 jobs at its subprime lending subsidiary Option One Mortgage Corp. as part of a cost-cutting restructuring plan that's expected to cost $19 million up front, according to a report the company filed Thursday with the Securities and Exchange Commission.

H&R Block Inc. announced last month an agreement to sell Option One to an affiliate of Cerberus Capital Management LP for $300 million less than the company's book value at the time the sale closes on or before Oct. 31.

The company said it would close its retail loan origination business, H&R Block Mortgage, before then. About 600 H&R Block Mortgage employees are expected to lose their jobs.

While other mortgage lenders have been laying workers off recently -- including LendingTree, ABN AMRO Mortgage Group, ACC Capital Holdings and New Century Financial Corp. -- Countrywide Financial Corp. this week announced plans to grow its sales force by 2,000 to boost the company's market share.

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