B&N's once mighty ebook division has fallen on hard times. What at one point was a billion dollar a year business has now shrunk to the point that there are digital publishing startups that have more revenue and larger work forces.
Barnes & Noble reported in its annual SEC filing that annual Nook revenues for the period ending 28 April totaled $111.5 million, down from $146.5 million the previous fiscal year. That is a decline of 24% in just a single year, and a decline of close to 90% from peak revenues in 2012.
The Nook division accounted for 3% of B&N's revenues, with gifts and toys accounting for 28% and media (including books, DVDs, etc) accounting for 69%.
B&N also told the SEC that as of 28 April, the Nook division employed 57 people, including part-time workers. It's not clear how many of those provide tech support, but we do know that many parts of the Nook division have been outsourced or shut down. eReader hardware development, for example, used to be handled in-house but has since been handed off to Netronix, a Taiwan-based OEM.
B&N had reduced staff and outsourced functions in a bid to reduce cost and turn the Nook division profitable; however, Nook continued to show an operating loss last fiscal year, costing B&N $36.3 million.
Edit: And yet somehow the Nook division also turned a profit, according to Forbes:
B&N CFO Allen W. Lindstrom noted in an earnings conference call that, ‘NOOK turned its first ever full-year profit, generating $3.5 million of EBITDA. Sales declines were offset by continued cost rationalization.'