Mozilla already announced their new strategy, they are shifting into a "Product" focused company. Which why is they laid off all these teams. The browser is no longer the focus. Indeed they laid off the Servo team.
So they cut teams that a) weren't directly working on their core browser and b) doesn't make money for spending on their browser.
The money from Google is practically a donation at this point. It's not exactly an altruistic one but it's not exactly a pure business transaction either given Firefox's current market share.
Your first bad assumption is that the amount of money is fixed.
And here is a 2013 post about the "next generation" engine (Servo) https://blog.mozilla.org/blog/2013/04/03/mozilla-and-samsung...
> So they cut teams that a) weren't directly working on their core browser and b) doesn't make money for spending on their browser.
Exactly, that means they do not see any value in closing the gap with Chrome. Servo was this plan that launched years ago. See this paragraph from the above post from 2013
> Servo is an attempt to rebuild the Web browser from the ground up on modern hardware, rethinking old assumptions along the way. This means addressing the causes of security vulnerabilities while designing a platform that can fully utilize the performance of tomorrow’s massively parallel hardware to enable new and richer experiences on the Web.
Not to mention their threat response team got laid off
https://www.securityweek.com/mozilla-cybersecurity-staff-hit...
I think Servo was branded as a research project pretty early on. That it would replace Firefox wasn't very realistic.