Ethereum Foundation Layoff Sparks Concerns Over Strategic Direction

The Ethereum Foundation has announced a significant restructuring effort, including layoffs within its research and development team. While touted as a strategic refocusing on key protocol design challenges, the decision has sparked concerns about the nonprofit’s direction and technical capabilities.

Ethereum Foundation Layoff Announced Amid Criticism

In an official blog post, the Ethereum Foundation has announced its layoff, with the restructuring focusing on its protocol design challenges. The post read,

“[S]ome members of PR&D won’t be continuing with the Ethereum Foundation. We hope these individuals continue on in the Ethereum ecosystem and encourage others building out their teams to seek them out.”

Notably, the restructuring coincides with the Ethereum Foundation facing persistent criticism over its management and strategic direction. The community had warned the nonprofit that its failure to overcome key technical challenges could erode its market position. As an initial effort to address these concerns, the platform underwent a restructuring in early March. Ethereum announced the appointment of Hsiao-Wei Wang and Tomasz Stańczak as co-Executive Directors.

Ethereum Foundation Targets Key Protocol Challenges

As part of the Ethereum Foundation layoff, the platform has rebranded its Protocol Research and Development division as “Protocol.” The platform cited, “We must rethink our current approach to designing, developing, and stewarding the protocol.”

The new division focuses on three main priorities: scaling Ethereum’s base layer, expanding blobspace, and improving user experience. The blockchain platform added, “The changes we’re announcing today are a departure from our previous ways of working, but we feel these set us on a more responsive and effective path.”

Further, Ethereum announced that the revamped Protocol team will act as a central hub for Ethereum’s core development. It will enhance transparency around upgrade schedules, technical documentation, and research findings.

Significantly, prominent industry leaders welcomed the Ethereum Foundation layoff with optimism. For instance, Hsiao-Wei Weng shared an X post, stating, “We’re hopeful that this new structure will empower our internal teams to focus more clearly and drive key initiatives forward.”

At the same time, Kyle Samani, co-founder of Multicoin Capital, pointed out the potential contradiction between the goals of expanding networks and improving user experience and the decision to lay off staff.

The layoff follows Ethereum’s Pectra upgrade, which has raised concerns about potential security vulnerabilities, especially related to malicious contracts targeting wallets with inadequate security measures.