The Ethereum Foundation reduces 20% of its staff: strategic restructuring or governance crisis?
The Ethereum Foundation (EF) has officially announced a major restructuring, resulting in a 20% reduction in its workforce. 54 employees are leaving the foundation — a decision that follows a lengthy internal audit and a review of its development strategy.
Scale and Reasons for the Layoffs
EF leadership confirmed these changes in an official blog post. The primary goal is to adapt the foundation's structure to a new strategy approved in March 2026. A key driver of the reform was the implementation of the Treasury Management Policy, adopted on June 4, 2025. Under the new rules, the share of annual operating expenses relative to reserves is now capped at 15%, with a plan to further reduce it to 5%.
The foundation's statement emphasizes: "As a result of this process, we have obtained a structure, areas of work, and a team that will allow us to address key tasks." EF is now transitioning to a seven-cluster model with a clear system of accountability. Priorities are shifting towards protocol security, censorship resistance, and ensuring user sovereignty.
Employees affected by the layoffs will receive compensation: one month's salary for each year of service (or the local minimum wage, whichever is higher), as well as assistance with finding employment within the Ethereum ecosystem.
Personnel Changes and New Projects
The restructuring is taking place against a backdrop of notable personnel changes. Over the past 10 days, two top managers have left the foundation: on June 19, Hsiao-Wei Wang, co-executive director and board member, departed, and in February, Tomasz Stańczak left. Since January 2026, at least eight senior executives have left the organization.
Interestingly, on June 22, just two days after the layoff announcement, five former senior researchers from the Ethereum Foundation launched Ethlabs — a new independent non-profit organization. The project is supported by Tom Lee, Joe Lubin, and other key figures. Ethlabs aims to accelerate the adoption of Ethereum in the institutional segment.
These events clearly demonstrate how expertise and the desire to develop the project are leaving the shrinking foundation and moving into a more decentralized ecosystem. On June 20, Tom Lee called concerns about a "protracted funding crisis" exaggerated, emphasizing that the foundation is gradually optimizing expenses.
Analytical Conclusion: The 20% reduction in EF's workforce is not merely a cost-cutting measure but a deep structural transformation. The foundation is consciously moving away from the role of a "giant employer" in favor of a coordinator model. However, the departure of key specialists and the creation of independent projects like Ethlabs point to an inevitable fragmentation of power within the ecosystem. Investors should closely monitor treasury reports and protocol updates — this will show how successfully EF implements its adjusted goals in an environment of growing decentralization.