The Ethereum Foundation has cut its headcount by 54 employees, representing approximately 20 percent of its total staff, as part of a reorganization. The move was made as part of a recent treasury management policy update, which set a new goal to reduce annual spend to a long-term target of ~5% per year by 2030. That change resulted in a hefty 40% budget cut this year alone.

The Ethereum Foundation is providing departing personnel severance alongside small transition grants to assist with the transition. Most departing team members are anticipated to remain contributors to Ethereum through roles in teams outside the Ethereum Foundation. The newly announced Ethlabs includes former EF employees Ansgar Dietrichs, Barnabé Monnot, Caspar Schwarz-Schilling, Josh Rudolf, and Julian Ma.

As part of the reorganization, the Ethereum Foundation restructured its personnel into five clusters: The Protocol Layer focused on hardening and scaling the Ethereum core protocol, the Access Layer focused on making state easily available, the User Layer focused on real-world scenarios, the Community Layer focused on public messaging, and the Institutional Layer focused on institutions and policy coordination.

Vitalik pointed out the trade-offs from the budget cuts and new structure. He said the purpose of the multi-client model will shift from client redundancy to specialization and protocol security will be transitioned toward AI-assisted formal verification to reduce the resource requirements of shipping upgrades. The EF Privacy and Scaling Explorations research team is also winding down and Devcon conferences will become smaller-scale.

In the long term, the Ethereum Foundation is targeting a soft lean-and-done protocol cycle that maintains a high bar for introducing new features to the network. This restructuring follows a wave of high-profile departures from the foundation over the past six months, which included former co-executive director Hsiao-Wei Wang, Carl Beek, Tim Beiko, and Josh Stark.