The Ethereum Foundation has reduced its workforce by 54 roles and slashed its 2026 budget by 40%, while reorganizing into five new operational clusters as it works toward a long-term goal of limiting annual treasury spending to 5% by 2030.
In a June 23, 2026 announcement, the Foundation confirmed it had cut roughly 20% of its staff from a total workforce of around 270 people. Alongside the layoffs, it also implemented a major budget reduction and restructured its operations into five domain-specific clusters, supported by dedicated operations and management teams, according to a blog post shared by Vitalik Buterin on the Ethereum Foundation’s official site.
This shift goes beyond cost-cutting. It reflects a strategic transition away from the Foundation’s historical role as Ethereum’s primary development hub toward a more focused mandate centered on protocol oversight, aligned with a tighter financial framework.
Ethereum Foundation restructuring and five-cluster model
The new structure replaces the previous functional organization with five core clusters: Protocol Layer, focused on areas such as post-quantum cryptography, zkEVM development, and Layer 1 privacy; Access Layer, building tools for users and AI agents to interact with Ethereum without intermediaries; User Layer, which studies real-world ETH usage to guide protocol decisions; Community Layer, responsible for public engagement across crypto, open-source, and research communities; and Institutional Layer, which works with governments, enterprises, financial institutions, and academics on Ethereum adoption and policy.
The Protocol Layer’s stated mission emphasizes that it is not intended to optimize Ethereum for short-term market appeal or to turn it into a traditional financial settlement network dominated by intermediaries. This signals a deliberate boundary between Ethereum’s core development priorities and TradFi-style product expansion, even as the Institutional Layer continues engagement with those same external stakeholders.
Treasury model and financial restructuring
The overhaul is tied to a broader shift in treasury management that began in mid-2025 and was formalized in a detailed mandate published in March 2026.
Currently, the Foundation spends about 15% of its treasury annually. Under the new endowment-style model, it aims to gradually reduce this to roughly 5% by 2030, a level it considers sustainable for long-term operations, according to analysis referenced by CoinMarketCap Academy.
As part of the restructuring, departing employees will receive severance packages of at least one month’s salary per year of service, along with retirement compensation and access to career transition support, including coaching and ecosystem placement assistance. Since January 2026, nine senior figures have left the organization, including former co-executive directors Tomasz Stańczak and Hsiao-Wei Wang, with interim leadership currently handled by Bastian Aue.
The announcement also followed the launch of Ethlabs, an independent protocol research group formed by former Ethereum Foundation contributors, highlighting a broader trend of development activity shifting away from centralized Foundation employment toward independent ecosystem organizations.
Funding continuity and ecosystem risk
Following the announcement, former core contributor Trent Van Epps warned that Ethereum’s core development ecosystem could face a funding gap within three to nine months, as existing incentive programs expire while Foundation spending contracts.
That short-term window is seen as a key risk period, separate from the longer-term question of whether the endowment model can sustain ongoing research output at scale.
In the near term, attention is likely to focus less on Ethereum’s price reaction—which saw ETH dip about 0.46% to $1,668 on the news—and more on whether independent groups like Ethlabs and other ecosystem-funded teams can absorb research responsibilities that the Foundation is now stepping back from.
Meanwhile, Consensys and other ecosystem players are continuing parallel work in areas such as zero-knowledge proofs, potentially overlapping with areas previously more closely associated with the Foundation’s core roadmap. The broader question is no longer whether the Ethereum Foundation needed to restructure, but whether decentralized funding channels can maintain development momentum without disruption.
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