Mozilla has been watching the user share of its flagship Firefox web browser shrink for a while, so it was hardly a surprise last week when the company announced it was doing some belt tightening that would result in another round of layoffs.
What was a surprise were the numbers involved: The company is laying off about 250 employees, for a staff reduction of 25%, and is completely closing its operations in Taipei, Taiwan. In addition, 60 employees will be shifted to new jobs, and the company will reduce spending on such things as developer tools, internal tooling and platform feature development.
Last week's layoffs were the second staff reduction Mozilla has had in 2020. In January, the company laid off about 70 employees – including some senior staffers – as a way of dealing with falling revenues due to steadily declining Firefox usage and market share numbers.
"Pre-COVID, our plan for 2020 was a year of change: building a better internet by accelerating product value in Firefox, increasing innovation, and adjusting our finances to ensure financial stability over the long term," Mozilla's CEO Mitchell Baker wrote in an email to employees announcing the layoffs. "We started with immediate cost-saving measures such as pausing our hiring, reducing our wellness stipend and cancelling our all-hands (meeting)."
The latest round of layoffs, according to Baker, are to deal with added pressure put on the company by the continuing pandemic.
"Our pre-COVID plan is no longer workable," she said. "We have talked about the need for change – including the likelihood of layoffs – since the spring. Today these changes become real."
While the pandemic might have hastened the problems at Mozilla, the problems the organization is now facing might have been inevitable. For about a decade, the company has been watching its Firefox usage rate – and its primary source of income – shrink.
The browser's market share peaked in July 2011 with Firefox usage at 34.1%, according to W3Counter; five months later, Mozilla inked a three-year deal with Google that brought the company $300 million yearly as a minimum revenue guarantee for searches from Firefox. That was followed in November 2017 by another agreement between Google and Mozilla, following a brief flirtation between Mozilla and Bing, but no dollar value was announced at the time. By then, Google's own browser, Chrome, was leading the pack, with a W3Counter usage rate of 59%, against a Firefox usage rate of 9.3%.
That 2017 agreement was set to expire later this year, but Mozilla recently reached a deal to extend the partnership. The terms of the latest agreement are not known, but a renegotiated contract is likely to see revenue shrink further, since Firefox was last measured at a 4.5% market usage rate.
"Recognizing that the old model where everything was free has consequences, means we must explore a range of different business opportunities and alternate value exchanges," Baker wrote in a blog that went up shortly after employees were notified of the layoffs. "How can we lead towards business models that honor and protect people while creating opportunities for our business to thrive?"
Despite the declining Firefox usage rate, the company still has Mozilla VPN, a virtual private network service that was officially launched last month. Initially offered as Firefox Private Network, a Firefox extension that gave users VPN access through the browser, the new rebranded $4.99 monthly service allows users to connect up to five devices (currently limited to Android, Windows 10 and iOS, but with Mac and Linux clients on the way) for full operating system access to the VPN, even through competing browsers.
The company may also try to increase its monetization efforts with Pocket, a content curation service it purchased in 2017 that can be accessed directly from the Firefox browser as well as through client apps on mobile devices. Although the service is free to consumers, it offers a limited amount of sponsored content.
"Going forward, we will be smaller," Baker said. "We’ll also be organizing ourselves very differently, acting more quickly and nimbly. We’ll experiment more. We’ll adjust more quickly. We’ll join with allies outside of our organization more often and more effectively."