The outsourcing comes after Barnes & Noble Inc announced that it is closing its offices in Santa Clara in California and in Taiwan.
The two offices will be shut down and their services will be turned over by July 2018. The services at the two offices include cloud management and development support for the e-reader.
“Over the last two years, the Company has done a significant amount of work to improve Nook’s overall performance,” explained Fred Argir, chief digital officer at Barnes & Noble, in a press release.
“While we have been able to reduce costs, we still have a lot more work to do to rationalize the business. We believe that by outsourcing certain technology functions of our Nook business we will further improve Nook’s performance,” he added.
Barnes & Noble To Save USD13 Million A Year
The shutdown of the two offices and the outsourcing of some technology services are expected to result in USD8 million in expense reduction savings and about USD5 million in capital expenditure reductions.
With the closure of the two offices, Barnes & Nobles Inc expects to report severance charges of about USD6 million in Q1 of next year.
This isn’t the first time Barnes & Noble has outsourced development to third parties — the company once made its own tablets in-house. In 2013, however, Barnes & Noble shifted to hardware partnerships and Samsung was the first to bring a Nook tablet to market.
Barnes & Noble, Inc. (NYSE:BKS) is a Fortune 500 company, the nation’s largest retail bookseller and a leading retailer of content, digital media and educational products. The Company operates 640 Barnes & Noble bookstores in 50 states (as of January 1, 2016), and one of the Web’s premier e-commerce sites, BN.com (www.bn.com). – BPONewsDaily.com