Mozilla slashes staff as subscription plans are delayed
Firefox maker cuts headcount by at least 70 upon the realisation that building subscription services will take longer than predicted
Mozilla has laid-off at least 70 staff, with the Firefox-maker saying its shift to subscription services hasn't produced the expected revenue.
In a memo seen by TechCrunch, CEO Mitchell Baker pinned the blame on Mozilla's move to paid for premium services, such as VPNs or cloud storage. More staff, in particular in the UK and France, may also face redundancy, the report said.
Baker said in the memo that Mozilla expected to earn revenue this year and next from new subscription products and other sources outside of search referrals, which is where the bulk of its income is derived, and largely handed to it by Google.
"This did not happen,” Baker says. “Our 2019 plan underestimated how long it would take to build and ship new, revenue-generating products."
Because of that miscalculation, Mozilla decided to "take a more conservative approach" to its 2020 revenue predictions.
The job cuts were confirmed in a blog post by Baker. "Creating the new products we need to change the future requires us to do things differently, including allocating resources for this purpose. We’re making a significant investment to fund innovation," she wrote. "In order to do that responsibly, we’ve also had to make some difficult choices which led to the elimination of roles at Mozilla which we announced internally today."
In 2018, Mozilla trialled a paid-for VPN, charging $10 a month to a small group of users, and announced in 2019 a partnership with ad-free news subscription service Scroll, though little has since been announced on either project. Earlier this year, Mozilla suggested such services could be joined by a cloud storage service, with subscriptions beginning in October, though that hasn't yet happened.
Mozilla has introduced a set of free features, including the Lockwise password manager, Monitor for breach notifications, and Send for sharing large files. One paid-for service Mozilla does offer is Pocket, the save-for-later reading app that it acquired in 2017, which offers a premium, ad-free version for $5 a month.
The shift away from advertising comes as rival browsers have caught on to Firefox's privacy-by-default focus, as web users' frustration with invasive tracking and irritating ads boils over; even Google is planning to ditch third-party cookies, eventually.
Such subscriptions could be one way Mozilla funds its work in the future, though it'll likely take a lot of VPNs to make up for the $435 million it made in 2018 from advertising and search revenue, the latter by sending users searches to Google and its rivals, which capitalise on that traffic via ads.
Managing security risk and compliance in a challenging landscape
How key technology partners grow with your organisationDownload now
Evaluate your order-to-cash process
15 recommended metrics to benchmark your O2C operationsDownload now
AI 360: Hold, fold, or double down?
How AI can benefit your businessDownload now
Getting started with Azure Red Hat OpenShift
A developer’s guide to improving application building and deployment capabilitiesDownload now