The writing is on the wall for Barnes and Noble, and I can't help but see what they've done here as mirroring what Circuit City did just before they shut everything down. IIRC, they ditched their most experienced sales-people, who were also the highest paid, and not soon there-after, they were done.
That said, I don't entirely agree with the assessment of the author. She sounds like one of the employees that was let go and her view of things might be colored by that. She seems to be over-valuing the contribution these employees made to the bottom line of the business. She may or may not be right; I can't, personally, speak to that -- where I live, there hasn't been a Barnes & Noble nearby in a long time. In fact, the place I work is located on the second floor of what once was a Barnes & Noble. When there was one a couple of miles from my home, I rarely purchased anything from them other than coffee.
This is anecdotal, of course, but I don't know that pulling employees from the floor and putting them to work boxing and shipping orders from the store was such a bad idea. If it did, indeed, decrease shipping time and costs, it would have been a fine use for that staff assuming they could find enough people to buy books online when those people could often save money at Amazon. In the decades that I did spend time at Barnes & Noble, my interactions were limited to the "kinda-Starbucks" folks and the (rare) store teenage cashier. Maybe I am a very specific customer[0]; I went there because of the selection of obscure programming books. I'd often need something not available at my library. They'd have a few options and I wanted to review them before having the library order it.
I buy the argument that it's not necessarily Amazon that was B&N's downfall -- it hurt, a lot, I'm sure and I know former B&N customers who now exclusively purchase via Kindle -- but there are a lot of people like me, who didn't buy books from either place. In a twist of irony, I own a second-generation Nook with the e-paper/color screen. I have never owned a Kindle.
Here's my take on where B&N fell over:
(1) Failure to recognize who the competition actually was. Amazon needn't be mentioned; it's obvious. But the big one for me was my local home-town library. They are just as close, a little bigger, just as nice (sans Fivebucks coffee), but I don't have to spend anything there and being a speed reader (skim/scan style, not the gimmicky nonsense), I get through my book during the borrowing window. They also have an automated self-checkout and self-dropoff, so I wait in far fewer lines. So I'm already inconvenienced by having to gasp drive somewhere, but my library handles the experience entirely better.
(2) Very expensive real-estate: I mentioned that my employer is in a former Barnes & Noble location. Our office is in an incredibly desirable area. I have no idea what the cost is, but I know that homes with fewer bedrooms than I have and half the square footage go for twice the price of my home (and homes just a few miles up the road) in less desirable parts of this suburb. The stores are very pleasant to be in, with expensive furnishings in expensive, convenient areas. These things don't come cheap. There's a reason the mom-and-pop book-sellers are located on the dumpier side of town, often have "use other door" signs posted on 8.5x11 paper with ink-jet Comic Sans all caps print and the books are jammed together on shelves stacked floor to ceiling separated by aisles that are barely large enough to meet ADA requirements... books are low-margin items. Every time I visited a Barnes and Noble for Fivebucks coffee I wondered how, on earth, they stayed in business.
(3) Staffing costs had to be high. Ignoring the whole thing about the CEO and executives making stupid amounts of money[1], the staff requirements to provide the level of customer service required of those customers who do need help, especially those who purchased a Nook and mistakenly thought that driving over to B&N would be helpful in solving their problems, is impossible to do profitably. And I don't think that the quality of their staff would have been the same as the mom-pop bookstores described in point #2. The few mom/pops that I've been to are staffed by book-obsessed individuals; those individuals are often also the owners of the place, and the owners of the place are often the only employees. Thinking back about a decade, when I last went to a B&N, I'm not entirely sure that I never needed help, but I am sure that I never received any. I don't ever recall seeing an employee anywhere other than at the coffee shop or behind the counter ringing people up. Where they had employees, they had to few of them. It always took forever to get out of there with a (rare) purchase; even a (less rare) coffee purchase. I think they are the record holder for me of saving me money through waiting . . . how bad did I want that coffee? 15 minutes, bad? Or that 2600 magazine that had the cool payphone photo that I wanted to keep; do I really want to wait in line behind those 9 other people for the one cashier who's ringing everyone up in their (pointless) common-feeder line?
(4) Inventory costs had to be high. I went to B&N only because I knew they had a huge selection, yet I rarely purchased anything from that selection[2]. I would have never walked into the store if they didn't have that selection, though. It's a lot easier for Amazon to handle that problem. My local library, as well, is massive and actually larger than the B&N was (though they had a more limited programming book selection). Back to point #1, their competition has far fewer difficulties doing what they do.
Of the problems I can see, fixing any of the bottom three would be customer-hostile in (probably) equal ways -- different impacts, but would take enough away that they'd lose a lot of business. Staffing -- the third -- is the only one that can be done quickly and have an immediate impact on the bottom line. The problem, though, is that it's like borrowing money at a higher interest rate to pay off debt[3]. They'll lose high- and probably medium-maintenance customers, and they'll lose customers sympathetic to the employees' circumstances which will drive them into cutting more. It's a downward spiral and they're so close to the bottom, I don't see them having a chance at this point.
[0] Generally, I ended up there in search of books related to programming, networks and other computing topics. They had the largest selection and I could crack the books open and see if they were worth burning the time on, which I would often then do in their coffee shop over a few weekend days. I'd occasionally look over the fiction titles under topics I like, but I don't read fiction, I listen to it and I generally did that by grabbing the CDs or (gasp) tapes from the library.
[1] I'm not disagreeing; it's absurd given that they're failing at their actual job, it's just obvious enough, IMO, that it doesn't require more detail.
[2] PSA- I feel that way about Microcenter, somehow they have almost everything that I can find on Newegg, and they manage to be nearly competitive, price-wise, with them. I don't want them to vanish, though, so I make it a point to do as much of my geek spending there, in-store, even if they are a little pricier; plus ... instant gratification is nice.
[3] Or, as is said all too often by people who aren't thinking about what it is they're actually saying, the equivalent to "digging yourself out of a hole".