Ethereum Foundation Cuts 54 Jobs and 40% of its Budget – Zk Research Lab Shut Down
-
Written by
Simonas Brazionis - Updated 2026-06-26 13:38:11
The Ethereum Foundation announced on June 23, 2026 that it is cutting 54 staff – about 20% of its roughly 270-person workforce – and slashing its annual operating budget by approximately 40%. Vitalik Buterin confirmed the budget figure in a separate post, framing the moves as a shift to an endowment model.
The target is annual spending of just 5% of treasury assets by 2030, down from roughly 15% today. The restructuring also closes Privacy and Scaling Explorations, the Foundation's in-house ZK research unit that built tools including MACI for private voting.
ETH fell around 5% on the news, trading near $1,549 on June 26. The broader market was already under pressure, with Bitcoin slipping below $60,000 on ETF outflows and higher Fed rate expectations.
Nine Leaders Gone Since January
The layoffs arrive during the most turbulent leadership period in the Foundation's history. Nine senior figures have left since January 2026, including co-executive directors Tomasz Stanczak and Hsiao-Wei Wang.
The Client Incentive Program, which funded independent teams building Ethereum's core software, expired in April 2026 with no announced replacement. Sustaining more than ten client teams costs roughly $30 million annually.
The EF's ETH holdings sit at approximately $209 million – near a six-year low. At 5% annual spending, that equates to roughly $10 million per year available for grants and operations combined.
What the Ef Says its Priorities Are
Alongside the layoffs, the Foundation published an execution plan. Core priorities include MEV elimination, default privacy for users, and a shift to ETH-denominated compensation for remaining contributors.
Protocol Guild and ETHLabs, backed by Ethereum co-founder Joseph Lubin, are candidates to fill the client funding gap. Neither has committed to comparable coverage yet.
What to Watch
The next 90 days are critical. Developer funding could hit a pressure point by September 2026 if no replacement for the Client Incentive Program is announced.
Anyone holding Ethereum should ensure their assets are secured in one of the best crypto wallets while the ecosystem navigates this transition – protocol-level uncertainty historically increases targeted phishing risk. Vitalik Buterin framed the cuts as strategically necessary, not reactive to short-term market movements. In a post on X he wrote that the EF must be resourced and organized for the critical work that only it can do. The focus narrows to protocol verification, privacy, and security. Departing staff will receive severance of at least one month's salary per year of service, plus access to a career coaching fund to help land roles elsewhere in the Ethereum ecosystem. The Foundation says it wants to minimize disruption to key ongoing projects. The EF's execution plan also introduces MEV elimination as a top technical priority for 2026 and 2027. MEV – maximal extractable value – refers to profits validators extract by reordering transactions, which critics say harms ordinary users. Eliminating it would be one of the most significant protocol-level improvements in Ethereum's history.
