Barnes & Noble Outsources Nook Technology

NEW YORK — Barnes & Noble, the nation’s largest retail bookseller, has entered into an agreement with India’s Bahwan CyberTek (“BCT”), a global software products and services company, to take over certain NOOK technology services, including cloud management and development support for NOOK software.

Barnes & Noble reiterated its commitment to the NOOK business and said it will continue to provide the NOOK service without customer interruption.

Barnes & Noble said that as a result of the agreement with BCT, it will close both its Santa Clara, CA and Taiwan offices. The business will be transitioned and the offices will be closed by July 2016.

“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 Barnes & Noble. “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.”

This 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.