Barnes & Noble has entered into an agreement with Bahwan CyberTek, a global software products and services company, through which BCT will take over certain Nook technology services, including cloud management and development support for Nook software. As a result of the agreement, B&N said it plans to close both its Santa Clara, Calif., and Taiwan offices. The business will be transitioned and the offices closed by July.
"Over the last two years, the company has done a significant amount of work to improve Nook's overall performance,” said Fred Argir, chief digital officer at B&N. "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."
B&N said the transition is expected to result in annualized cash savings of approximately $13 million, which includes approximately $8 million of expense reductions and approximately $5 million of capital expenditure reductions. In the first quarter of fiscal 2017, the company expects to record severance charges and transition related costs of approximately $6 million.
