Making headlines, the Ethereum Foundation announced on June 23, 2026 that it had cut 54 positions, or approximately 20% of its workforce of approximately 270 people. In addition to headcount, the EF also reduced its operating budget by 40% for 2026, reorganizing the rest of the organization into five specialized clusters as well as dedicated operations and management functions, according to an article published by Vitalik Buterin on the official EF blog.
This is not just a reduction in force. This is a deliberate shift from the FE’s historical role as the central driver of Ethereum’s development towards a narrower mandate as an overseer of the protocol, with a financial architecture to match.
Ethereum News: Layoffs at the Ethereum Foundation and New Cluster Structure: What the Reorganization Covers
The five clusters replacing the previous functional structure are: the protocol layer, focused on post-quantum security, zkEVM and L1 privacy; Access Layer, creating tools for users and AI agents to transact and delegate on-chain without intermediary dependencies; User Layer, conducting empirical research into actual usage of the ETH network to support protocol decisions; Community Layer, which manages the public positioning of the EF in the field of cryptography research, open source software and cryptography; and the institutional layer, engaging financial institutions, businesses, governments, and academics on Ethereum integration and policy monitoring.
Today, the FE is changing shape, concluding a months-long reorganization process as part of the implementation of the treasury management mandate and policy.
We emerge from this process with the structure, activities and people necessary to execute on critical points…
– Ethereum Foundation (@ethereumfndn) June 23, 2026
The published mandate of the Protocol Layer cluster indicates this “does not exist to make Ethereum more marketable or focused on short-term interests, nor to facilitate its transformation into another financial rail controlled by intermediaries.” This framing is a direct signal of the FE’s intended distance from TradFi-adjacent product development, even as its institutional layer deepens engagement with precisely these counterparties.
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Staffing model and financial mechanisms behind budget cuts
The restructuring advances a cryptographic restructuring of the FE’s treasury policy that began in earnest in June 2025 and was formalized in a 38-page mandate document published in March 2026.
Current annual expenses amount to approximately 15% of remaining cash assets; the goal of the new staffing model is to reduce that rate to about 5% by 2030, a pace the foundation describes as sufficient to sustain operations indefinitely, according to a study compiled by the CoinMarketCap Academy.
Departing employees will receive a severance package of at least one month’s salary per year of service, retirement compensation and access to a support fund that includes career support and ecosystem placement assistance. Nine senior officials have left the FE since January 2026, including former co-executive directors Tomasz Stańczak and Hsiao-Wei Wang, with Bastian Aue taking an interim leadership role.
This year, the FE is reducing its budget by around 40%, which involves difficult decisions. The target for the reductions was set out in last year’s Treasury Management Policy: the FE is becoming a long-term, endowment-based organization, evolving…
– vitalik.eth (@VitalikButerin) June 23, 2026
The announcement came a day after former EF researchers launched Ethlabs, an independent protocols lab, a move that illustrates the broader dispersion of Ethereum development capacity outside of the foundation’s direct payroll. This shift in blockchain governance structure, from centralized funding of foundations to a more distributed ecosystem of independent research entities, is precisely what the FE’s new organizational logic is designed to accommodate rather than resist.
Continuity of financing and short-term risk window
Former core contributor Trent Van Epps issued a pointed warning during community discussions following the announcement: the core development could face a structural funding shortage within three to nine months as customer incentive programs expire, coinciding with the FE fiscal contraction.
This timeline is the primary risk to watch in the short term, separate from the long-term question of whether the staffing model can support the speed of large-scale research.
We believe the most important indicator over the next two quarters will not be the price reaction of ETH, down 0.46% on the day of the announcement and already looking bad at $1,668, but whether independent entities like Ethlabs and other ecosystem-funded groups decide to absorb protocol research that the FE has explicitly underestimated.
Joe Lubin’s Consensys has reported its own zk-proof development schedule, which may partially overlap with the work EF is pulling back on. The analytical question is no longer whether the FE should restructure; it is a question of whether the ecosystem’s distributed funding mechanisms can fill the gap before research continuity is disrupted.
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Neil is a professional cryptocurrency content writer with years of experience. He has written for various cryptocurrency websites to report on the latest news and has been hired by all kinds of cryptocurrency projects, to create content that would increase their visibility and attract more potential investors.
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