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B&N to Save $40 Million Following New Layoffs

13 February 2018

From Publishers Weekly:

After posting disappointing holiday results, Barnes & Noble instituted a round of layoffs yesterday that it says will save the company $40 million annually. After CNBC reported Monday that the retailer fired “lead cashiers and digital leads,” a B&N spokesperson confirmed the layoffs, but declined to give the size of the cuts or what departments were affected. However, in a filing Tuesday with the SEC, B&N reported that it will take an $11 million charge in its third quarter to account for severance payments.

The filing further noted that B&N expects to complete the staff reductions by February 16 of this year.

. . . .

B&N described the cuts as “a new labor model for its stores that has resulted in the elimination of certain store positions. The new model will allow stores to adjust staff up or down based on the needs of the business, increase store productivity and streamline store operations.”

Link to the rest at Publishers Weekly

PG suggests that “We’re firing our way to success!” is a long-standing management strategy with a rich history of failure.

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12 Comments to “B&N to Save $40 Million Following New Layoffs”

  1. I applaud B&N for this move.

    Obviously it was those pesky lead cashiers that led to the death spiral the company is in.

    Well done.

  2. This is so wrong in soooo many ways…

    – Those experienced “leads” is where a company’s corporate memory really resides. The people who’ve been through the wars and seen it all, who know where the scripts and handbooks end and common sense crisis management and experience takes over. They are lobotomizing operations.

    – If the difference between “lead” pay and entry level is the only thing between them and bankruptcy… Well, they might as well file right now. $40M in “savings”? That’s less than $80,000 per store. For that they disrupt people’s lives and cripple their operations? Smacks of desperation. Chapter 11 must be closer than even the harshest critics expects.

    – The move tells the newcomers what to expect. No promotion. No long term security. Lower benefits than the people previously doing the job. Surely they’ll be lining up to apply…

    – Have the B&N execs noticed that (official) unemployment is down and the labor market is tightening? This despite the much hyped “retail apocalypse”?

    https://www.nytimes.com/2018/01/13/business/economy/labor-market-inmates.html

    Somebody didn’t think this through.

    Anyway, how long has the B&N CEO du jour been on the job again?

    • Good points, Felix.

    • Here are comments from affected employees: https://www.thelayoff.com/barnes-and-noble

    • Firing full-timers and keeping part-timers is what you do if you need to save on benefit payments, such as health insurance. In personal finance terms, this is a “which bill do we pay this month” sort of decision.

    • Spot on Felix.

      Not a surprise the mental juggernaut that is the collective B&N leadership missed all that though.

      and saving 80k per store is nonsense. That is ~$1500 per week. (I’m too lazy to do real math)

      If that’s going to turn things around (it isn’t) they don;t have to worry about the death spiral. they are on the Thelma and Louise car ride at the moment.

    • > For that they disrupt people’s lives and cripple their operations? Smacks of desperation.

      Want to bet that a bunch of publishers said some bad words at reading this? When Borders went under, they did it just before 2 quarters of payments were due, and nearly took a bunch of mid-sized publishers with them.

      Short of demanding cash up front, any ideas how publishers can limit their liability in case of bankruptcy?

      • None.
        However, it cuts both ways: the publishers were the reason why Borders went to court looking for protection while they reorganized to survive and ended up in total liquidation.

        The publishers insisted on squeezing as much money as possible out of Borders is why all bids to buy the functional stores failed. Otherwise there still woukd be a 200 store Borders out there.

        Odds are, B&N’s stubborn refusal to admit tbeir business model is a failure and go for a chapter 11 “rinse” to save the company is due to the fear they’ll be liquidated, too.

        In the Borders case, the BPHs killed a channel that moved ~20% of $9B each year (almost $2B a year) to maximize their collection on a $200M debt. One estimate I saw was that the push to liquidation was over a $45-60M difference.

        The entire NYC corporate publishing establishment, from publisher to agent to B&N, is the living embodiment of “penny wise and pound foolish”.

  3. The board said reduce payroll X dollars. Somebody else said “But fire as few people as possible.” And yet another, “But not our friends.” Viola! Stunning leadership.

  4. Turns out they cut even deeper into their productivity.
    Nate is reporting they fired the receiving managers, too.

    https://the-digital-reader.com/2018/02/13/19-months-counting/

    He gives them ’til next January.
    I think they’ll make it to 2020. Maybe March.

  5. In a company-wide e-mail, one of our very high ups recently referred to the “right-sizing” of some of our departments as a positive thing they did this year. *eyeroll* I don’t think layoffs are always necessarily a bad thing. It’s the constant need to spin that offends me.

  6. This is how the end of BGI started…

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