The Ethereum Foundation has completed a comprehensive reorganization that eliminated 54 positions, representing approximately 20% of its workforce, as part of a sweeping organizational overhaul tied to its long-term development strategy. According to the latest announcement, the foundation is cutting its budget by roughly 40%, concluding a months-long restructuring process carried out under the organization's Mandate and Treasury Management Policy. The foundation stated that affected employees will receive severance packages, transition assistance, and additional grants to help cover career transition expenses. As per the organization, "These decisions were hard, but they are necessary. We must be 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."
Co-founder Vitalik Buterin has framed the cuts as a deliberate strategic shift rather than an efficiency drive, calling it "a deliberate trade, not an efficiency drive." The foundation's June 2025 treasury policy set annual spending at 15% of holdings, with a 2.5-year cash buffer, and it has mapped a glide path to a 5% endowment baseline by about 2030. Buterin tied the budget to Ethereum's Strawmap, calling it the network's third iteration after the Merge, and wants that core protocol overhaul finished, then a higher bar for new features. He expects leaner shipping and more of the protocol to shift from client redundancy to AI-assisted formal verification, reducing upgrade costs. The organization has adopted a seven-cluster structure with clearer accountability across core domains, focusing on protocol security, censorship resistance, and privacy.
The Ethereum Foundation has experienced its second co-executive director departure in four months, with Hsiao-Wei Wang stepping down as co-executive director and board member with immediate effect last week. According to latest reports, Bastian Aue, who served as interim co-ED after Tomasz Stańczak stepped down in February, is now effectively the sole executive director of the Foundation with no succession structure announced. Wang thanked Aue for guiding the transition during her prior sabbatical, but the leadership exodus comes at a critical time as the network faces significant financial pressures. The departure follows at least 19 senior researchers and executives leaving since January 2026, with roughly nine senior figures leaving or transitioning out of the Ethereum Foundation over the past six months, raising questions about governance and direction amid the foundation's broader reorganization.
Not everyone views the cuts negatively, with Solana co-founder Anatoly Yakovenko arguing that "Bullish… Budget constraints force prioritization and focus. Ethereum isn't going away. A smaller and leaner EF will be more decisive and will move faster and will be able to course correct faster." He believes tight budgets force focus and that the leaner foundation will operate more efficiently. However, former foundation contributor Trent Van Epps warned of a roughly $30 million annual funding gap for core development. The cuts include a smaller Devcon, the wind-down of Privacy and Scaling Explorations, and fewer projects beyond Ethereum. Despite the workforce reduction, Ethereum developers are continuing work on major protocol upgrades, including the upcoming Glamsterdam upgrade that includes work on Enshrined Proposer-Builder Separation and Block-Level Access Lists.
Ethereum reflected the unease with Ether's price action sliding below $1,660, down about 5% over 24 hours, though it retained its rank as the second-largest cryptocurrency, valued at about $200 billion. BitMine chairman Tom Lee has dismissed warnings of a funding crisis, calling it "zero chance" of happening, betting that private backers and stakers will step in. That bet is already taking shape, with five former foundation researchers launching an independent nonprofit, Ethlabs, backed by Lee and Ethereum co-founder Joe Lubin to push institutional adoption. The next treasury reports and protocol milestones will test whether the smaller foundation can ship faster, as Yakovenko predicts, or whether the lost talent slows Ethereum's most ambitious upgrade yet.
