Ethereum Foundation Undergoes Major Reorganization, Reducing Workforce by 20% and Redefining Strategic Focus

The Ethereum Foundation (EF) has concluded a months-long organizational overhaul, reshaping its structure and operations while reducing its workforce by 54 employees, representing approximately 20% of its total staff. This significant restructuring is a direct consequence of implementing the Foundation’s recently established Mandate and Treasury Management Policy, signaling a refined, more focused strategic direction for the organization responsible for supporting the Ethereum ecosystem. The move aims to streamline efforts on critical, long-term tasks essential for Ethereum’s foundational promise of scaling self-sovereignty, ensuring resilience against market fluctuations and fostering sustainable development.

Background: The Ethereum Foundation’s Evolving Role

Established in 2014, the Ethereum Foundation is a non-profit organization dedicated to supporting Ethereum and related technologies. Its initial mission involved funding and coordinating the core development of the Ethereum blockchain, from its inception to its current status as a global, decentralized computing platform. Over the years, as Ethereum matured and its ecosystem expanded exponentially, the EF’s role naturally evolved. From direct, hands-on development, it gradually shifted towards fostering research, supporting public goods, and ensuring the long-term health and decentralization of the network. This evolution has been punctuated by major milestones, most notably the transition to Proof-of-Stake with "The Merge" in September 2022, which significantly altered the technical landscape and, by extension, the strategic imperatives for the Foundation.

The decision to reorganize comes amidst a broader industry landscape characterized by both rapid innovation and periodic market volatility. While Ethereum has cemented its position as a leading blockchain platform, the EF, as its primary non-profit steward, faces the continuous challenge of allocating resources effectively to maintain decentralization, security, and scalability without succumbing to short-term market pressures or commercial interests. The previous operational model, while effective during earlier growth phases, required adaptation to a more mature and complex ecosystem, necessitating clearer boundaries and more targeted efforts.

A Deliberate Process: Mandate and Treasury Policy as Drivers

The reorganization is not an impulsive reaction but the culmination of a "months-long process" driven by two foundational documents: the EF Mandate and the Treasury Management Policy. The Mandate, publicly available, serves as a guiding star for the Foundation, clarifying its core mission and areas of focus. It emphasizes the EF’s commitment to advancing the Ethereum protocol while upholding its fundamental properties: censorship and capture resistance, open source principles, privacy, and security. It explicitly steers the EF away from activities that could compromise its neutrality or align it with narrow commercial interests, reinforcing its public good mission.

The Treasury Management Policy, detailed in a blog post dated June 4, 2025, provides a framework for responsible financial stewardship. Given that the EF primarily holds assets in cryptocurrencies, its financial stability can be significantly impacted by market swings. This policy is designed to ensure that the Foundation can continue its vital work "without excessive disruption from short-term market movements." By establishing clear guidelines for asset allocation, risk management, and expenditure, the policy indirectly influences staffing and operational capacity, mandating a leaner, more resilient organizational structure capable of weathering economic cycles. Together, these policies provided the strategic and financial rationale for the comprehensive review and subsequent restructuring.

The New Structure: Five Strategic Clusters for Focused Impact

Emerging from this restructuring, the EF now operates with a refined organizational chart centered around five distinct "clusters," each dedicated to a specific domain of work, alongside an operations cluster and a management/support cluster. This new layered approach is designed to tailor strategies, accountability, and internal structures to the unique requirements of each area, ensuring maximal impact on Ethereum’s long-term vision.

1. Protocol Layer: This cluster embodies the EF’s core legacy and responsibility for the foundational Ethereum protocol. Its paramount objective is to "harden and scale the Ethereum protocol itself," ensuring it delivers on its promise of "scaling self-sovereignty." This involves safeguarding core properties such as censorship and capture resistance, open source principles, privacy, and security as "non-negotiable protocol guarantees." The Protocol Layer is tasked with safely shipping network upgrades (forks), reducing unnecessary complexity in the protocol, minimizing trusted dependencies, and defending against harmful practices like "toxic MEV" (Maximal Extractable Value) and "privileged orderflow." Crucially, it also accelerates long-horizon research in areas like post-quantum security, zkEVM (zero-knowledge Ethereum Virtual Machine), and Layer 1 privacy, aiming to integrate these advancements into the protocol without compromising self-sovereignty. The EF explicitly states this layer "does not exist to make Ethereum more marketable or focused on short-term interests," but rather to make it "harder to corrupt or capture."

   

2. Access Layer: Focused on the practical application of Ethereum’s core properties, the Access Layer aims to make "self-sovereignty available, legible, and survivable" for individual users. This cluster is dedicated to ensuring individuals can perform key actions—reading the chain, transacting, proving, delegating, and exiting—without relying on unverifiable intermediaries. It emphasizes the need for private, censorship-resistant transactions and verifiable interfaces from hardware to front-end. The guiding principle for the Access Layer is the "zero option": for every intermediated path, a credible, intermediary-free alternative must exist and remain accessible. This involves identifying areas where "CROPS properties" (Censorship Resistance, Openness, Privacy, Security) can be strengthened in current infrastructure and developing alternatives where economic incentives favor aggregation and control.

3. User Layer: The User Layer acts as a crucial bridge, grounding the EF’s technical work in the real-world needs of users and organizations. Its purpose is to ensure that Protocol and Access Layer decisions are informed by actual user capabilities, common failure modes, and acceptable trade-offs. This cluster undertakes work related to user segments, personas, educational materials, use-case research, and impact evaluation. While not a "product studio," it ensures the EF remains attuned to the practical implications of its work, measuring progress against tangible improvements in self-sovereignty for current and potential users.

4. Community Layer: This cluster manages the EF’s external presence and engagement within and beyond the Ethereum ecosystem. Its role is to articulate what the EF stands for, differentiating it from "zero-sum financial crypto," "corpo-compromised crypto," and other grant-managing non-profits that may be susceptible to external influences. The Community Layer is committed to maximizing community value by maintaining independence. It also focuses on building relationships with natural allies in fields such as free and open-source software, secure hardware, privacy and cryptography research, civil liberties, decentralized web initiatives, and public-interest technology, fostering "fruitful, unforced, and high-quality" collaborations.

5. Institutional Layer: The Institutional Layer engages with various institutions—financial, non-financial enterprises, governments, universities, and other non-profits—that interact with Ethereum. Its objective is to facilitate the integration of Ethereum and cryptographic technologies in ways that maximize CROPS properties and offer strong guarantees to both institutions and end-users. This includes ensuring fair and correct execution, data portability, user privacy, data authenticity, and the prevention of misbehavior. The EF believes that many institutions will find their incentives align with strengthening user self-sovereignty while still achieving their mission. This cluster also develops best practices, standards, reference architectures, and educational materials for institutional adoption, and works with academics and advocacy organizations to correctly contextualize Ethereum in policy and regulatory discussions worldwide.

The Human Cost: Supporting Departing Colleagues

The reorganization necessitated difficult personnel decisions, leading to the departure of 54 colleagues. This reduction, representing approximately 20% of the Foundation’s workforce (implying a previous staff count of around 270), was described by EF leadership as "hard, but necessary." The rationale underscores a strategic imperative to ensure the Foundation is "resourced and organized in a way that allows us to focus on the critical work that only EF can, and therefore must, do in the coming years, without excessive disruption from short-term market movements."

To support those affected by the layoffs, the EF is providing a comprehensive severance and transition package. This includes severance pay calculated as the higher of one month’s salary per year worked at the EF or the amount legally mandated by the individual’s local jurisdiction. This policy is consistent with severance offered in previous, smaller rounds of departures. Additionally, departing employees will receive transition support, including assistance in finding new roles within the broader Ethereum ecosystem and a "small transition grant" specifically earmarked for covering individual transition expenses such as career coaching.

EF leadership expressed profound gratitude for the "talent, dedication, and time" contributed by these individuals to Ethereum and the Foundation. They also voiced optimism about the possibility of continuing to collaborate with many of them as they transition to other roles within the vibrant and expanding Ethereum ecosystem.

Implications for Ethereum and the Ecosystem

The reorganization marks a pivotal moment for the Ethereum Foundation, signaling a strategic sharpening of its focus and a commitment to long-term sustainability.

• Strategic Clarity: The new cluster structure provides unparalleled clarity on the EF’s priorities. By delineating specific layers, the Foundation can allocate resources more precisely and measure impact more effectively, ensuring its efforts are aligned with its core Mandate.
• Resilience and Sustainability: The financial prudence reflected in the Treasury Management Policy and the resulting leaner structure positions the EF to be more resilient to the inherent volatility of the cryptocurrency market. This enables sustained, long-term support for critical protocol development, even during downturns.
• Decentralization and Ecosystem Empowerment: A more focused EF could implicitly encourage greater self-organization and initiative within the broader Ethereum community. As the Foundation concentrates on core, foundational work, other entities and decentralized autonomous organizations (DAOs) within the ecosystem may naturally step up to fill gaps in areas not directly covered by the EF’s refined scope, further strengthening decentralization.
• Talent Redistribution: While the layoffs are a difficult outcome, the departure of 54 skilled professionals presents an opportunity for talent redistribution within the wider Ethereum ecosystem. These experienced individuals, equipped with deep knowledge of Ethereum, are likely to join or establish new projects, contributing to the diversity and innovation of the network from different vantage points. The EF’s support package, including career assistance, aims to facilitate this positive migration of talent.
• Enhanced External Engagement: The dedicated Community and Institutional Layers suggest a more deliberate and sophisticated approach to external relations. This could lead to more impactful collaborations with allied fields and more effective communication with policymakers and traditional institutions, ultimately broadening Ethereum’s reach and understanding.

The Ethereum Foundation that emerges from this extensive reorganization is a leaner, more strategically focused entity. EF leadership has indicated that more detailed information regarding the changes in work scope and engagement opportunities for the ecosystem will be shared in the coming weeks and months, inviting the community to adapt and engage with this new chapter in the Foundation’s history. This strategic pivot underscores the EF’s unwavering commitment to the foundational principles of Ethereum and its long-term vision for a self-sovereign digital future.