Firefox’s developer Mozilla is laying off about 250 company employees, citing the economic impact from COVID-19.
Going into this year, the company launched a plan to run a leaner operation, including pausing hiring and cutting 70 staffers. But on Tuesday, Mozilla’s CEO Mitchell Baker said a “significant restructuring” was needed to keep the company financially afloat.
“Economic conditions resulting from the global pandemic have significantly impacted our revenue. As a result, our pre-COVID plan was no longer workable,” she wrote in a blog post.
Last November, Mozilla reported over 1,000 full-time employees, so the company is cutting about a quarter of its workforce. It’s also decided to close Mozilla’s operations in Taipei, Taiwan while another 60 people will “change teams,” Baker said in an internal message to employees.
Mozilla generates most of its revenue through the Firefox browser. Although the product is free for consumers, the company has struck royalty deals with Google and Yahoo to feature their search engines in the browser as the default choice. However, money from the deals has been declining. In 2018, the royalties only raked in $429.7 million, down from $539.2 million the year before.
The company also pulls in revenue from advertising. However, the pandemic has prompted many businesses to stop buying ads.
As a result, Mozilla is going to focus on developing new revenue streams outside of Firefox. “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 said in her internal message.
One of Mozilla’s newest products includes a paid VPN service, which costs $4.99 a month. The company is also working on a VR-chatroom platform called Hubs, and a news reading app called Pockets, in addition to security and privacy-related products.
Mozilla is creating a new design and user experience team to support these products. However, the company is cutting some costs around the Firefox browser. “We are reducing investment in some areas such as developer tools, internal tooling, and platform feature development, and transitioning adjacent security/privacy products to our New Products and Operations team,” Baker said.
