Amidst a flurry of news headlines, the Ethereum Foundation announced on June 23, 2026, that it was cutting 54 jobs, roughly 20% of its workforce of about 270 people. Not only did it cut its workforce, but it also cut its 2026 operating budget by 40%, and reorganized the remaining organization into five domain-focused groups along with dedicated operations and management support functions, according to a post by Vitalik Buterin on the official EF blog.
This is not just a reduction in staff numbers. It is a deliberate pivot away from EF’s historical role as Ethereum’s central development engine towards a narrower mandate as steward of the protocol, with the appropriate financial structure.
Ethereum News: Ethereum Foundation Layoffs and New Group Structure: What the Reorganization Covers
The five groups that replace the previous functional architecture are: the protocol layer, which focuses on post-quantum security, zkEVM, and L1 privacy; Access layer, building tools for users and AI agents to transact and authorize on-chain without relying on an intermediary; User layer, conduct experimental research on the actual use of ETH network for terrestrial protocol decisions; Community layer, managing the overall EF situation across cryptocurrencies, open source software, and crypto research; and the institutional layer, engaging financial institutions, businesses, governments and academics in Ethereum integration and policy tracking.
Today, the European Fund is changing shape, concluding a months-long reorganization as part of the implementation of its mandate and treasury management policy.
We emerged from this process with the structure, activities and people needed to deliver on the critical things…
— Ethereum Foundation (@ethereumfndn) June 23, 2026
The protocol layer group’s published mandate states this “It is not there to make Ethereum more marketable or focused on short-term interests, or to facilitate the transition to another broker-controlled financial mint.” This framing is a direct indication of how far EF intends to be in developing products adjacent to TradFi, even as the institutional class works to deepen engagement with exactly these counterparties.
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The endowment model and the financial mechanisms behind the cuts
The restructuring advances the cryptocurrency restructuring of the IMF’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 spending is about 15% of remaining Treasury assets; The goal under the new endowment model is to reduce that rate to approximately 5% by 2030, a pace the foundation describes as enough to sustain operations indefinitely, according to research compiled by Coin Market Cap Academy.
Departing employees will receive at least one bonus One month’s salary for each year of serviceRetirement payment and access to a support fund that includes vocational training and assistance in setting up the ecosystem. Nine senior figures have left EF since January 2026, including former co-CEOs Thomas Stachak and Hsiao-Wei Wang, with Bastian Ooi serving in an interim leadership role.
This year, the European Front is cutting its budget by about 40%, which requires making some difficult decisions. The target for cuts was set in last year’s Treasury Management Policy: EF is shifting to a long-term endowment-based organisation, and…
— Vitalik.eth (@VitalikButerin) June 23, 2026
The announcement came one day after former researchers at EF Ethlabs, an independent protocol lab, released a sequence that illustrates the broader dispersion of Ethereum development capacity away from an organization’s direct payroll. This shift in the governance structure of blockchain, from centralized institutional funding to a more distributed ecosystem of independent research entities, is exactly what EF’s new regulatory logic is designed to accommodate rather than resist.
Continuity of financing and near-term risk window
Former core contributor Trent Van Eps issued a clear warning in the community discussion after the announcement: Core Development may face a structural funding shortfall in three to nine months as customer incentive programs expire coinciding with EF’s budget contraction.
This timeline is the primary risk to watch in the near term, and is different from the longer-term question of whether the moratorium model is able to maintain the speed of research at scale.
We believe the most important indicator over the next couple of quarters will not be the reaction of ETH price, as it was 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 move to accommodate the protocol research that EF has explicitly focused on.
Joe Lubin Consensys has ticked off its timeline for developing ZK resistancewhich may partially overlap with the work that EF is undoing. The analytical question is no longer whether the European Fund needs to be restructured; Rather, it is whether the distributed funding mechanisms of the ecosystem are able to absorb the gap before the continuity of research is interrupted.
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Neil is a professional cryptocurrency content writer with years of experience. He has written for numerous cryptocurrency websites to report breaking news, and has been hired by all kinds of cryptocurrency projects, to create content that will increase their exposure and attract more potential investors.
