MV Capital - Ethereum Foundation Cuts 20% of Staff in Major Restructuring

The Ethereum Foundation has eliminated 54 positions, representing about 20% of its workforce, as part of a broad organizational overhaul aimed at long-term focus and budget discipline amid ongoing community questions about funding

Workforce Reduction and New Structure

The Ethereum Foundation announced the layoffs on June 23, 2026, concluding a months-long internal process tied to its updated mandate and treasury management policy. The changes aim to create a leaner organization better positioned to handle core responsibilities in Ethereum's development.

Key Facts54 positions eliminated, roughly 20% of total workforce
New structure organized around five clusters: protocol, access, user, community, and institutional
Management and operations handled by separate teams
Affected staff receive severance, transition support, and grants

The Foundation stated that these decisions, while difficult, are necessary to focus resources on critical work that only it can perform, reducing vulnerability to short-term market fluctuations. Vitalik Buterin noted the Foundation plans to cut its budget by roughly 40%, shifting toward a more sustainable endowment model with annual spending dropping from about 15% to around 5% of funds after 2030.

Leadership Changes and Departures

The restructuring follows significant leadership turnover. Co-executive director Hsiao-Wei Wang stepped down recently, joining previous exits including co-executive director Tomasz Stańczak. Board member Bastian Aue now oversees daily operations. In recent months, several senior figures have left or shifted roles, raising questions about governance.

“These decisions were hard, but they are necessary. We must be resourced and organized in a way that allows us to focus on the critical work...” Ethereum Foundation announcement

Launch of ETHLabs and Ecosystem Shifts

Coinciding with the Foundation's announcement, former researchers Ansgar Dietrichs, Barnabé Monnot, Caspar Schwarz-Schilling, Josh Rudolf, and Julian Ma launched ETHLabs, an independent nonprofit focused on Ethereum infrastructure, scaling, interoperability, and institutional adoption. The group has backing from Ethereum co-founder Joe Lubin, BitMine, SharpLink, and others.

ETHLabs operates independently, with its own research priorities separate from funders. This move reflects a broader trend of distributing development work across specialized organizations.

Funding Transparency and Community Concerns

The changes have sparked debate in the community about Ethereum's funding model. Questions have arisen regarding support for new initiatives like ETHLabs and others, especially amid ETH's recent price performance. Some observers point to treasury funds, grants, and large holders as primary sources, while calling for clearer disclosures on budgets and outcomes.

Funding ContextFoundation moving to lower spending rate for long-term sustainability
Proposals discussed include potential validator contributions for ecosystem support
Emphasis on transparency and accountability in spending decisions

Former contributors have warned of potential funding pressures for core development, estimating annual needs around $30 million for client teams. The Foundation's Client Incentives Program ended earlier this year.

Ongoing Protocol Priorities

Despite the internal changes, work continues on key Ethereum upgrades, including the Glamsterdam release focusing on scaling, proposer-builder separation, and other improvements. The new institutional cluster will target enterprise partnerships and policy coordination.

The Foundation highlighted its CROPS framework — censorship resistance, capture resistance, openness, privacy, and security — as guiding principles for future efforts.

Aspect	Details
Staff Impact	54 layoffs, severance and support provided
Budget Shift	~40% reduction, long-term endowment approach
New Entities	ETHLabs and others for distributed development