DALLAS – Blockbuster Inc. (BBI), the nation's largest movie-rental chain, plans to lay off up to 20 percent of its headquarters staff in Dallas and the suburb of McKinney, company officials said.
"We won't be finished with the reduction until the end of April, but our best estimate is that we will eliminate between 200 to 300 jobs," Karen Raskopf, a senior vice president said Wednesday. The company did not immediately return calls from The Associated Press Thursday afternoon.
The cuts are designed to help offset an incremental $70 million that the company said it would spend this year on Blockbuster Online (search).
Blockbuster earlier said it would have to cut costs and reduce its corporate staff to help build its growing online DVD rental business.
Raskopf said as many as 30 percent of the staff cuts may come from positions budgeted for this year but as yet unfilled.
Blockbuster last week abandoned its plans to acquire rival Hollywood Entertainment Corp. (HLYW) for $991 million.
Shares of Blockbuster were unchanged at $8.60 Thursday on the New York Stock Exchange (search). The stock has been trading at a 52-week range of $6.50 to $17.87.
On Tuesday, Blockbuster agreed to pay $630,000 to settle claims from 47 states that said its "No Late Fees" rental policy deceived customers,
Under the agreement, a statement from Pennsylvania Attorney General Tom Corbett's office said. Blockbuster will be required to make full refunds to customers who claim that they were misled and were charged restocking fees or the full price of movies rented if they were returned seven days after the due date.
It said the agreement, which also includes the District of Columbia, would dramatically alter the way Blockbuster advertises its "No Late Fees" policy in the future.
New Jersey last month had filed a lawsuit that accused Blockbuster of failing to disclose key terms of its new rental policy.
Under the "No Late Fees" policy, Blockbuster said customers would have a one-week grace period after the rental due date. If a movie or game were returned after the grace period, the customer would be charged for the purchase of the item.
If the item were returned within 30 days, the customer would receive an account credit but would be charged a restocking fee of $1.25.
Full details of the settlement were scheduled to be released later on Tuesday, Corbett's office added in a brief news release. The Pennsylvania attorney general's office was one of six leading state agencies to negotiate the agreement with Blockbuster.