According to multiple media outlets quoting the Ethereum Foundation's official blog, on June 23, the EF announced the completion of a months-long organizational restructuring, laying off 54 employees, representing about 20% of the total workforce, and dividing the original team into five core work clusters. The EF is not a typical crypto company; it has long played a role in Ethereum protocol research, development coordination, and ecosystem support. For investors and developers, the organization's downsizing will impact not only the workforce size but also Ethereum's upgrade schedule, ecosystem fund flows, and the foundation's stance on institutional adoption and regulatory pressure.

The official explanation for this adjustment is not merely cost-cutting. The EF describes it as the implementation of the March 2026 "Mandate" and the June 2025 "Treasury Management Policy," with the goal of streamlining the foundation and placing "self-sovereignty" at the core. In the Ethereum context, this points to users relying as little as possible on intermediaries and not being subject to asset and data censorship or forced custodianship.

However, the timing itself carries tension. Over the past six months, the EF has experienced several high-level departures and governance adjustments, while the external market has been discussing Ethereum ecosystem fragmentation, L2 competition, funding support, and roadmap execution efficiency. The official narrative is a mission focus, but the external concern is whether this signifies EF shrinking under pressure and whether it will change the pace of Ethereum's development and ecosystem support.

After a 20% Layoff, EF Splits Organization into Five Work Clusters

Post-restructuring, EF's core work has been divided into five clusters: Protocol, Access, User, Community, Institutional, corresponding to the protocol layer, access layer, user layer, community layer, and institutional layer. In addition, EF has retained supporting clusters like Operations and Management.

The protocol layer remains closest to Ethereum's core roadmap, responsible for protocol enhancement and long-term research, focusing on reducing harmful MEV, addressing front-running, post-quantum security, zkEVM, L1 privacy, and other directions. EF's most critical technical roles still lie in the underlying protocol, making Ethereum more resistant to corruption, control, or censorship, rather than shifting towards short-term productization.

The access layer further emphasizes whether ordinary users can truly and permissionlessly use Ethereum. The EF mentioned a "zero option" principle in the announcement, implying that even with a proliferation of wallets, node services, custodians, or institutional gateways in the market, users should still have an untethered trustless path for read, write, proof, and exit. This pertains to whether Ethereum is merely a settlement network packaged by financial institutions or still retains its independent verifiable, exitable underlying capabilities.

The user layer, community layer, and institutional layer are reclassified the EF's previously disparate external engagements. The user layer is responsible for bringing real user pain points back into the decision-making process, the community layer is tasked with upholding the EF's independent image and connecting to a broader range of allies in open-source, privacy, and civil liberties. The institutional layer targets financial institutions, enterprises, and government scenarios to promote integration methods more aligned with Ethereum's values while also tracking regulatory changes.

In this announcement, the EF did not disclose the headcount, budget allocation, or specific KPIs for each cluster, nor did it publish the list of laid-off employees. Based on the "54 people, about 20%" hint, the total number of employees before the reorganization was around 270 people, but the official figure was not provided.

From CROPS as a Value Slogan to EF's Organizational Principles

The keyword behind this reorganization is CROPS. In the "Mandate," the EF defines it as several irreplaceable attributes: censorship resistance, open-source and freedom, privacy, and security. Simultaneously, the official narrative also emphasizes anti-capture, meaning the network cannot be easily controlled by a single country, institution, exchange, validator group, or financial intermediary.

These words may seem like values, but they will directly impact what kind of infrastructure Ethereum will be built into in the future. Censorship resistance relates to whether transactions and applications can be arbitrarily excluded, open source and freedom relate to the transparency of the core code, standards, and participation pathways, while privacy and security determine whether Ethereum can support more financial and non-financial activities.

The EF had already brought these principles to the forefront in the "Mandate" released in March 2026. This round of layoffs and reorganization essentially transforms the value proposition into an organizational structure. The protocol layer and access layer take on more defensive tasks: one guarding the underlying protocol, the other safeguarding the user's entrance from being locked by intermediaries. The presence of the institutional layer shows that the EF is not opposed to enterprises, financial institutions, and governments using Ethereum but hopes that these use cases will not unduly sacrifice CROPS principles.

This also explains why the announcement did not make short-term market performance, ETH price, or ecosystem commercialization the main focus. The EF is striving to emphasize that it is not adjusting its organization to chase a particular market trend or institutional adoption but is instead redefining boundaries under the context of crypto financialization, L2 decentralization, and regulatory pressure.

Offering Redundancy and Transition Support, But Not Disclosing Budget Allocation

For departing employees, EF stated that it would provide a redundancy package higher than the local statutory standard. The specific standard is based on the length of an employee's tenure at EF, with each year of service corresponding to one month of salary, and choosing the higher standard after comparing it with local requirements. Departing employees will also receive assistance in transitioning within the ecosystem, as well as a small transition grant.

This arrangement sends two signals. First, the layoffs are not a sudden one-time action but rather part of a restructuring process over the past few months. Second, EF hopes to retain some departing talent within the Ethereum ecosystem, shifting to work with other teams, projects, or public goods rather than completely exiting the ecosystem.

Budgetary issues remain one of the most concerning uncertainties for external parties. The Treasury Management Policy released in June 2025 stated that EF's current annual operating expenditure target is 15% of the total treasury, with a 2.5-year operating buffer and plans to gradually reduce to a long-term 5% baseline over the next five years. The restructuring announcement on June 23 did not outline cluster budgets, KPIs, or subsequent funding allocations, nor did it describe the layoffs as an emergency action due to financial crisis.

For the market, the difference lies in whether this is an orderly resource reallocation, where the impact may be more reflected in changes to project priorities. If there is a larger budget squeeze behind the scenes, ecosystem funding, research positions, and long-term public good investments could all be more directly affected. The facts that can currently be confirmed still primarily revolve around the scale of the layoffs, organizational structure changes, and EF's commitment to disclose more details in the future.

Official Emphasizes Focus on Mission, Market Sees Governance Pressure

The tone of EF's announcement this time is relatively positive: a lighter and more focused organization, support for departing employees, and a new structure that will help the foundation better accomplish its long-term mission. However, external reports generally interpret it under a different timeline. In the past six months, the Ethereum Foundation has undergone leadership adjustments, with several senior executives leaving or changing roles, and discussions about its governance efficiency and strategic direction in the market have not stopped.

This contrast is at the core of this news. As the Ethereum ecosystem continues to grow, L2, staking, DeFi, institutional custody, and regulatory interfaces are all on the rise. On the one hand, EF wants to avoid being seen as a "centralized manager," while on the other hand, the market expects clearer direction on the roadmap, public goods funding, and external communication. After a 20% reduction in workforce, this contradiction will not disappear but is more likely to be magnified.

In the short term, it is difficult to simply categorize this restructuring as ETH bearish or bullish. There is no evidence to suggest that EF is urgently laying off staff due to depleted funds, nor is there evidence to prove that the new five major clusters will definitely increase development efficiency. The more realistic question is which research and engineering projects will have increased priority under the new structure, which public goods funding will be compressed, and whether the institutional layer will change EF's approach to regulation and traditional finance.

EF stated that in the coming weeks to months, they will continue to disclose the operational changes of each cluster and new ways of interacting with the ecosystem. For investors and developers, the values expressed in the announcement are already clear enough. What is more challenging to assess is where the resources will ultimately go: whether protocol upgrades will be expedited, long-term research will be maintained, ecosystem funding will change, and departing talent will stay within Ethereum or move to other chains and crypto projects.

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia