Barnes and Noble is seeking to retool the Nook division and to stem the tide of declining revenue. The company has lost over a billion dollars since they first unveiled the Nook e-Reader back in 2011. They are hoping to solve the situation by firing a large percentage of their workforce, capitalizing on digital sales and releasing a new tablet.
Since fiscal 2014 began, approximately 190 NOOK positions have been eliminated both through reductions and attrition. The bookseller has spent over $2.4 million dollars on severance packages, but should save money in the long-term. Most of these positions were in the hardware and programming departments. Currently, even with these reductions Nook has 500 people currently working in that division. Likely, further layoffs are anticipated to happen during the year.
Last quarter Barnes and Noble sold $50 million dollars worth of digital content, which incorporates apps, books, magazines and videos. In the US, the bookseller controls roughly about 20% of the eBook market, whereas a year ago they had 27%. The bookseller is hoping to capitalize on more international distribution via Microsoft to boost revenue. This is a good model, because it is not reliant on internal staff to promote and market the Nook Reading app for Microsoft, the Redmond company is doing a fine job at hyping it.
Finally, Barnes and Noble announced plans for a new Nook tablet to be released sometime this year. If we look at past trends, it will likely come out in October, to gear up promotional efforts both online and in the retail stores for the pivotal holiday season. Nothing is really known about the tablet yet, but there are rumors that the company will be dealing with Foxconn to manufacture the devices and their California R&D division will handle the design.