The Ethereum Foundation has officially announced a workforce reduction of 54 employees, equating to approximately 20% of its total staff, as part of an extensive reorganization aimed at aligning its operations with a newly defined mandate and improved treasury management strategies.
This decision was revealed in a blog post by the foundation, detailing a shift towards a leaner operational framework that will focus on initiatives deemed essential for Ethereum’s long-term advancement. Employees affected by the layoffs will receive severance packages and support during their transition out of the organization.
These staff reductions come in the wake of notable leadership changes within the foundation. Co-executive director Hsiao-Wei Wang has stepped down following her sabbatical, while earlier this year, co-executive director Tomasz Stańczak also departed. Additionally, several other senior leaders have either left the organization or assumed different roles in recent months.
New Five-Cluster Organizational Structure
As part of the reorganization, the Ethereum Foundation has adopted a new operational model structured around five key work clusters: protocol layer, access layer, user layer, community layer, and institutional layer. Two further clusters will focus on operations and management.
The protocol layer is set to concentrate on the core technical development of Ethereum, addressing concerns such as protocol hardening, scaling, privacy, security, and censorship resistance. This subgroup will work on crucial elements like safe fork delivery and advancing long-term research initiatives including zkEVM and post-quantum security.
Meanwhile, the access layer will enhance how users interact with the blockchain, facilitating transactions, proving activity, delegating authority, and enabling exits without relying on intermediaries. This aligns with Ethereum’s commitment to maintaining credible self-custody and non-custodial pathways.
Furthermore, the user layer will focus on understanding user needs and measuring impact, while the community layer will manage the foundation’s public relations and interactions across various tech communities.
Leadership Turnover and Budget Reductions
The institutional layer will specifically handle partnerships with financial institutions, enterprises, governments, and universities, focusing on practical Ethereum integrations and policy engagement.
This restructuring arrives at a time when debates surrounding the Ethereum Foundation’s role within a rapidly evolving ecosystem are intensifying. Many responsibilities that were traditionally under the foundation’s purview may now be assumed by external organizations and new research groups.
Vitalik Buterin, co-founder of Ethereum, commented on the budgetary implications of this transition, revealing that the foundation is cutting its budget by approximately 40% as it shifts toward a long-term endowment model. Historically, the foundation operated on a spending model that consumed about 15% of its remaining funds annually, but it aims to lower this to about 5% per year post-2030.
Buterin acknowledged the substantial contributions of the departing employees, emphasizing the significant impact they had on Ethereum’s protocol development over the years. He noted that many of these individuals may continue their contributions to the Ethereum ecosystem independently.
Launch of Ethlabs: A New Research Initiative
The restructuring also coincides with the emergence of new organizations focused on Ethereum development and institutional adoption. Ethlabs, a newly established nonprofit research and development group, has been launched with backing from notable Ethereum treasury firms and co-founder Joseph Lubin.
Among the supporters of Ethlabs are BitMine Immersion Technologies and SharpLink Gaming, both of which play significant roles in the Ethereum ecosystem. This new group is anticipated to concentrate on Ethereum’s technical roadmap and foster institutional adoption, further diversifying the research landscape outside of the foundation.
Additional collaborative groups have also been formed within the ecosystem, including the Ethereum Applications Guild, Ethereum Economic Zone, and Argot Collective. The Ethereum Foundation has expressed its commitment to shared stewardship of the Ethereum network, emphasizing the importance of collaboration with organizations dedicated to building the infrastructure necessary for self-sovereignty.
As part of the transition, the foundation is ensuring that departing employees receive severance equivalent to the greater of one month’s salary per year of service or the minimum required by local labor laws, alongside support in securing new roles within the Ethereum ecosystem and a small grant for related transition expenses.
