Social enterprise promises “generous exit packages”
Mozilla has confirmed that it is laying off staff, after an internal memo revealed up to 70 roles will be cut after new products failed to hit revenue targets.
Mozilla Corporation, where the cuts are happening, is a wholly owned subsidiary of the Mozilla Foundation: the maker of Firefox and other open source tools.
It is hugely reliant on global browser search partnerships, including via a deal negotiated with Google in 2017. In 2018, the latest year for which a full report is available, the Mozilla Corporation generated $435.702 million from royalties, subscriptions and advertising revenue, down over $100 million year-on-year.
(The corporation says this is not indicative of a broader slump: “2017 was an outlier, due in part to changes in the search revenue deal that was negotiated that year”.)
The Bay Area-based organisation functions as a “self-sustaining social enterprise – money earned through its products is reinvested into the organisation.”
It has offices in 10 locations around the world, including Beijing, Berlin, London and Vancouver. It was not immediately clear where the roles were being cut.
Mozilla Job Cuts: Move Comes Despite “Strong Line of Sight on Future Revenue Generation”
Mozilla chairman Mitchell Baker described herself as “deeply distressed” about the timing of decision in a blog post late Wednesday, saying improved financial performance was around the corner, but the decision had to be made.
She wrote: “We’re making a significant investment to fund innovation.
“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. Mozilla has a strong line of sight on future revenue generation from our core business.
“This makes this action harder, and we are deeply distressed about the effect on our colleagues. However…we must work within the limits of our core finances.”
As reported by Techcrunch, Baker said laid-off employees will receive “generous exit packages” and outplacement support. In total, Mozilla is dedicating $43 million to building new products, many of which it has started testing in recent months.
These will be primarily subscription-based, as the company tries to move away from the search revenue that dominates its income stream.
New products undergoing testing include the Firefox Private Network (a browser plug-in/proxy server underpinned by Cloudflare and a device-level VPN service).
In 2018, the latest year for which Mozilla has published its financial records, over 90 percent of its royalty revenues came from search contracts.
Among its other open source projects is Common Voice: a bid to produce an open source, production-quality speech-to-text (STT) and text-to-speech (TTS) engine powered by a data set of “donated” voices. The project comes amid barriers to innovation in the sector: developers who want to implement STT on the web are working with a fractured set of APIs and support; access to a non-browser-based API from Google, IBM or Nuance can be expensive, costing up to “one cent per invocation.
As Mozilla earlier noted: If you go this route, then you get one stable API to write to. But at one cent per utterance, those fees can add up quickly.”