Mozilla has laid off 70 people, TechCrunch reports. It's a significant move for an organization that employs around 1,000 people worldwide.
"You may recall that we expected to be earning revenue in 2019 and 2020 from new subscription products as well as higher revenue from sources outside of search," wrote Mozilla interim CEO Mitchell Baker in a memo to staff obtained by TechCrunch. "This did not happen."
Baker said Mozilla had decided not to shelve Mozilla's $43 million innovation fund, which focuses on creating new Mozilla products. She said Mozilla would provide "generous exit packages and outplacement support" to those who were let go.
Each year, companies pay hundreds of millions of dollars to be the default search engine in Mozilla's flagship Firefox browser. Google has been Mozilla's primary customer over the years, but at various times Mozilla has also had deals with Yahoo!, Yandex, Baidu, and other search providers. In recent years, these deals have accounted for more than 90 percent of Mozilla's revenue.
Mozilla generated $429 million in royalty revenue (mostly from these search deals) in 2018, the most recent data available.
The market share of Mozilla's flagship browser, Firefox, has been steadily declining for at least a decade. And Mozilla's leadership is understandably nervous about having so much of its budget dependent on a single revenue stream. So the organization has been trying to develop new lines of business.
Mozilla is developing a virtual private network service. It will include an option to provide device-wide privacy protections for $4.99 per month. However, the service isn't yet available to the publicwould-be customers are invited to "join the waitlist."
Mozilla briefly offered an enterprise support option for $10 per user but then removed the option days later. A spokesperson said that Mozilla was "still exploring" an enterprise offering but wasn't ready to start offering one just yet.
Mozilla has developed a variety of products, including file-transfer software and a password manager. But none has gained significant traction or generated much revenue for Mozilla.
Mozilla has struggled to adapt as the Internet increasingly shifted to mobile devices and has been increasingly dominated by a handful of large companies. In the desktop era, millions of people went out of their way to download and run Firefox. In the mobile era, by contrast, most customers stick with the defaults provided by Apple or Google, respectively. Apple's App Store rules effectively make it impossible for Mozilla to offer a full-fledged Firefox browser on iOS. Firefox on iOS is based on Apple's WebKit rendering engine, making it difficult for Mozilla to distinguish itself on the platform.
In the early 2010s, Mozilla tried to counter this strategic threat by developing its own mobile operating system called Firefox OS that was built entirely on Web technologies. But the platform didn't get significant traction from smartphone makers, and Mozilla ultimately abandoned it in 2017.