The maker of Firefox, Mozilla Corporation, is laying off about 70 employees on sagging revenues.
The company's latest products, which focus on paid subscriptions, have taken Mozilla longer to develop and ship than it originally anticipated. This has caused revenues to come in under projections, Mozilla's executive chairwoman Mitchell Baker told employees in an email, which was obtained by TechCrunch.
"Given that, and all we learned in 2019 about the pace of innovation, we decided to take a more conservative approach to projecting our revenue for 2020. We also agreed to a principle of living within our means, of not spending more than we earn for the foreseeable future," Baker reportedly said.
Mozilla has decided to lay some folks off and restructure things. All the leads in QA got let go. I haven't been let go (so far). No idea what I will be working on or who I will be reporting to. Some good work friends let go :( — Chris Hartjes (@grmpyprogrammer) January 15, 2020
The paid subscription products include Mozilla's attempt to create a VPN service, the Firefox Private Network. But for now the upcoming $4.99 service is still in beta testing, and can currently only be joined via a waitlist. In recent months, the company has also teased other paid products, including online cloud storage and an ad-free news subscription service. This occurs as Mozilla has been struggling to capture the same revenue as it did in years past.
Although Firefox is free to consumers, it's been able to generate funds for Mozilla, thanks to royalty deals with Google, Yahoo! and others to feature their search engines in the browser as the default choice. However, revenues from the deals have been falling. In 2018, the royalties only raked in $429.7 million, down from $539.2 million the year before. During the same period, Firefox's market share fell to 5 percent, a decrease from 10.6 percent. Google's Chrome, on the other hand, had a 65 percent share.
News of the staff cuts doesn't bode well for competition in the browser space. But in a blog post, Baker said it was necessary for Mozilla to allocate resources to promising projects without taking on more costs. "We are deeply distressed about the effect on our colleagues. However, to responsibly make additional investments in innovation to improve the internet, we can and must work within the limits of our core finances," she wrote. Her posts goes on to say Mozilla plans on innovating in areas including security, privacy, and content discovery in addition to tackling problems such as disinformation and the surveillance.
In November, Mozilla reported it had over 1,000 full-time employees.