A Techcrunch report suggests that Mozilla laid off at least 70 employees to better prepare for the challenges that it is facing in the coming years.
Mozilla, which is bests known for its Firefox web browser, depends to a very large degree on a deal with Google. Google pays Mozilla more than 90% of its revenue for being the default search engine in the Firefox web browser in most regions.
The deal is problematic for a number of reasons: first, because Google operates Chrome, the main contender in the browser market and dominating force at the time of writing, and second, because Google's business model, advertising, clashes with Mozilla's mission to strengthen privacy on the Internet.
Mozilla started to implement Tracking functionality in Firefox but the efforts don't go far enough for many users; probably the main factor that is preventing Mozilla from implementing better controls in Firefox is the organization's reliance on Google.
The overall number of employees that have been laid off may even be higher as Mozilla has yet to decide how employees from France and the UK are affected by the decision.
The organization has about 1000 employees worldwide. Mozilla CEO Mitchell Baker cites the slower than expected rollout of revenue generating products as the main reason for the decision. Mozilla revealed plans to diversify the organization's income through other products to reduce the dependency on Google.
A strong focus is on subscription-based products. Mozilla revealed Firefox Premium, an Enterprise-exclusive service that provides better support to subscribers, and a new VPN/browser-proxy service that is currently undergoing beta testing.
The organization wants to "to take a more conservative approach" to projecting revenue and avoid spending more than it earns in the "foreseeable future".
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. This did not happen. Our 2019 plan underestimated how long it would take to build and ship new, revenue-generating products. 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.
Laid-off employees will receive "generous exit packages" and support according to the internal memo that Techcrunch has access to.
Mozilla's revenue dropped in 2018 significantly and resulted in revenue being lower than the expenses in that year.
Mozilla hopes to diversify its revenue sources with new subscription-based products. It is certainly possible that the built-in Firefox VPN could push revenue significantly as it can be advertised directly to users of the web browser as a means to strengthen privacy while on the Internet.
On a personal note; I think that Firefox development will be held back as long as Mozilla makes deals with advertising companies. The problem is that privacy focused search engines like DuckDuckGo are too small to replace Google even if it would mean that their revenue is boosted significantly if Mozilla would make them the default search engine in Firefox.
A different kind of deal, e.g. a revenue share agreement, could work though but it would put a lot on the line.
Mozilla needs to deal with the dominance of Chromium as well. With Microsoft now using Chromium as well, the first stable version of Microsoft Edge that is based on Chromium launched yesterday, it is facing overwhelming odds when it comes to development.
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