Ethereum Foundation Announces Major Reorganization and 20 Percent Workforce Reduction to Align with New Strategic Mandate

The Ethereum Foundation (EF), the non-profit organization dedicated to supporting the Ethereum ecosystem, has officially entered a new phase of its organizational evolution, concluding a comprehensive months-long restructuring process. This transition, aimed at streamlining operations and sharpening the organization’s focus on core protocol development, marks the formal implementation of the EF Mandate and a newly established Treasury Management Policy. As a central component of this reorganization, the Foundation confirmed today that it has reduced its workforce by approximately 20 percent, resulting in the departure of 54 staff members. The move is designed to ensure the Foundation remains a lean, resilient entity capable of executing critical long-term tasks without being overly susceptible to the volatility of the broader cryptocurrency markets.

The reorganization follows a period of intense internal review and public discourse regarding the Foundation’s role within an increasingly decentralized and commercially diverse ecosystem. By consolidating its efforts into five distinct "clusters"—Protocol, Access, User, Community, and Institutional—the EF aims to clarify its responsibilities and distinguish its mission from the profit-driven motives of the wider "crypto" industry. The Foundation’s leadership emphasized that while the reduction in force was a difficult decision, it was necessary to align the organization’s human and financial resources with its core objective: defending and scaling the self-sovereignty guarantees of the Ethereum protocol.

A Chronology of Strategic Evolution and Financial Oversight

The restructuring of the Ethereum Foundation did not occur in a vacuum. It is the culmination of a strategic shift that began to accelerate following the successful execution of "The Merge" in late 2022 and the subsequent "Dencun" upgrade in early 2024. These technical milestones shifted the focus of the Ethereum roadmap toward a "rollup-centric" future, where the base layer (Layer 1) serves primarily as a secure settlement and data availability engine for Layer 2 scaling solutions.

In mid-2024, the EF introduced a more rigorous Treasury Management Policy. This policy was developed in response to calls for greater transparency and financial sustainability. Historically, the EF has funded its operations through the sale of ETH held in its treasury, a practice that requires careful timing to avoid market disruption and ensure longevity. The new policy formalizes how the EF manages its assets, ensuring that even in prolonged "bear market" conditions, the Foundation can maintain a decade-long runway to support essential research and development.

This financial recalibration necessitated a leaner operational structure. The Foundation’s headcount had grown steadily over the years to manage a diverse array of grants, research initiatives, and community outreach programs. However, as the Ethereum ecosystem matured, many functions originally incubated within the EF began to find natural homes in independent startups, decentralized autonomous organizations (DAOs), and other non-profit entities. The current reorganization effectively "offboards" certain functions to the broader community, adhering to the Foundation’s long-standing philosophy of "subtraction"—the idea that the EF should only do what no other entity can or will do.

The Five-Cluster Architecture: Redefining the EF’s Core Domains

The new organizational structure is built around five specific layers of work, each designed to address a different facet of Ethereum’s development and adoption. This modular approach allows for specialized management and accountability across the Foundation’s diverse portfolio.

The Protocol Layer: Hardening the Foundation

The Protocol Layer remains the spiritual and technical heart of the Ethereum Foundation. This cluster is tasked with the monumental responsibility of ensuring that Ethereum delivers on its foundational promise of scaling self-sovereignty. Its primary objective is to harden the protocol against censorship, capture, and centralizing forces.

The work of this cluster is explicitly non-commercial. It does not focus on making Ethereum "marketable" or catering to short-term financial interests. Instead, it prioritizes long-horizon research and development, including:

• Post-Quantum Security: Preparing the network for a future where quantum computing could threaten current cryptographic standards.
• zkEVM Integration: Accelerating the development of zero-knowledge Ethereum Virtual Machines to enhance privacy and scalability.
• L1 Privacy: Implementing protocol-level changes that provide users with non-negotiable privacy guarantees.
• MEV Mitigation: Defending the transaction pipeline against "toxic" Maximum Extractable Value (MEV) and privileged orderflow that could lead to validator centralization.

The Access Layer: Ensuring Intermediary-Free Interaction

The Access Layer cluster focuses on the practicalities of how individuals interact with the blockchain. Its mission is defined by the "zero option" principle: for every path that involves an intermediary (such as a centralized exchange or a hosted wallet provider), a credible, high-quality, intermediary-free path must exist.

This cluster oversees the development of tools for reading the chain, transacting, and delegating authority without compromising user control. As AI agents increasingly participate in the on-chain economy, the Access Layer ensures that users retain the ability to grant and revoke authority at will, keeping custody of their "intents" rather than exposing them to third-party extractors.

The User Layer: Grounding Development in Human Needs

The User Layer cluster serves as a bridge between high-level protocol research and the actual needs of users and organizations. It is responsible for conducting use-case research, impact evaluation, and creating educational materials. By developing personas and studying real-world constraints, this cluster ensures that Protocol and Access Layer decisions are shaped by the actual requirements of self-sovereign use rather than theoretical abstractions. The EF clarified that this cluster is not intended to turn the Foundation into a "product studio," but rather to provide a feedback loop for core development.

The Community Layer: Independence and Advocacy

The Community Layer cluster is responsible for the Foundation’s external identity and its relationships with the global Ethereum community. A key part of its mandate is to distinguish the EF’s work from what it describes as "zero-sum financial crypto" and "corpo-compromised" projects. This cluster works to maintain the Foundation’s independence from geopolitical interests and perversely-incentivized grant-managing organizations.

Furthermore, this group builds alliances with allied fields, such as free and open-source software (FOSS), local-first hardware, and civil liberties advocacy. By aligning Ethereum with broader movements for digital privacy and decentralized web technologies, the Community Layer aims to broaden the network’s cultural and social impact.

The Institutional Layer: Strategic Integration and Standards

The Institutional Layer cluster manages the EF’s engagement with large-scale entities, including financial institutions, manufacturing enterprises, governments, and universities. The goal is to create "showcases" of how Ethereum can be integrated into institutional workflows while maximizing "CROPS" properties—Censorship resistance, Resilience, Openness, Privacy, and Security.

This cluster works upstream with academics and regulators to ensure the protocol is correctly understood. By establishing reference architectures and standards for institutional adoption, the EF hopes to prevent the erosion of user guarantees as Ethereum becomes a global financial and data rail.

Supporting the Workforce Transition

The departure of 54 colleagues represents a significant loss of institutional knowledge, and the EF has announced a comprehensive support package for those affected. The severance package includes the higher of one month’s pay per year of service or the local jurisdictional mandate. Additionally, departing staff members will receive "transition support," which includes assistance in finding new roles within the Ethereum ecosystem and a small grant earmarked for career coaching and related expenses.

The Foundation noted that many of those leaving are expected to continue contributing to Ethereum from the "outside," either by joining existing teams or starting new initiatives. This movement of talent from the EF into the broader ecosystem is viewed by leadership as a natural progression of the "subtraction" philosophy, where the Foundation seeds the ecosystem with skilled developers and researchers who then operate independently.

Broader Implications and Ecosystem Analysis

The Ethereum Foundation’s restructuring reflects a broader trend in the blockchain industry toward professionalization and long-term sustainability. For years, the EF has been criticized by some for its perceived lack of transparency and by others for its massive influence over the protocol’s direction. By slimming down and clarifying its clusters, the EF is attempting to address both criticisms.

The focus on "self-sovereignty" and "CROPS" properties indicates that the EF is doubling down on the "cypherpunk" values that originally birthed the project. This is particularly relevant as the industry faces increasing regulatory scrutiny in the United States and Europe. By distancing itself from the purely speculative and financial aspects of the market, the EF is positioning Ethereum as a public utility and a tool for digital rights.

From a technical perspective, the reorganization suggests that the EF will be less involved in "user-facing" applications and more focused on the deep-tech challenges of the L1. This leaves a significant vacuum—and opportunity—for Layer 2 teams and independent developer collectives to take the lead on user experience, onboarding, and application-level innovation.

As the EF emerges from this process "leaner and more focused," the coming months will be a test of whether this new structure can effectively manage the complex roadmap toward a fully scaled, secure, and private Ethereum. The Foundation has promised to share more details on the specific activities of each cluster in the weeks ahead, providing a clearer map for how the ecosystem can engage with the revamped organization.