Mozilla announces layoffs and restructuring amid revenue drop
posted Saturday Aug 15, 2020 by Scott Ertz
In decades past, the browser wars were a major part of the technology world. Everyone and their mother was making a web browser, and everyone wanted to be in charge. What a lot of the developers learned was that offering a software product that was a lot of work to make for free was not a great way to generate revenue. Today, the browser wars are mostly settled, with Google, Microsoft, and Mozilla being the last major players. While Google and Microsoft use the revenue from other divisions to keep their browsers aloft, Mozilla has little else going on. This week, that business model bit them and their employees.
Mozilla Corporation, the for-profit division of the Mozilla Foundation, which makes Firefox, announced that it will be laying off 250 employees. This represents a quarter of the global workforce of the company. The employees being let go are said to be receiving a severance package that equates to full pay through the end of the year.
The layoffs come as revenue has begun to slip for the company. The majority of Mozilla's revenue comes from contracts with search engines to integrate into the browser in different regions. Some of those contracts are expiring before the end of 2020, which could explain why the move is happening now, in preparation. The browser's shrinking market share is also leading to lower revenue against the performance bonuses.
This is the second round of layoffs in 2020. The first, which only represented 70 employees in January, gave some additional insight into what is happening within the company. Mozilla has been working on other products in an attempt to generate more regular revenue, such as the VPN service subscription. Unfortunately, the company underestimated the amount of time it would take to develop, test, and deploy these new products.
Because of the increased development costs and declining revenue, layoffs were inevitable. But a restructure was also inevitable. The company has said that it will halt development in its Developer Tools, internal tools, and more, in order to put focus back on developing new products and Firefox, which has suffered in recent months.