zkSync Parent Firm Axes 16% Of Workforce, Will Other Ethereum Layer 2 Follow?

Matter Labs, the company behind Ethereum Layer-2 protocol zkSync, has announced its plans to restructure the organization. Unfortunately, this involves a couple of staff reduction that impacted about 16% of the Matter Labs’ team. According to the CEO of the firm Alex Gluchowski, this decision is the hardest the company has had to make in the six years of its operations.

Matter Labs to Meet Developers’ New Demand

In his X post, Gluchowski further explained that Matter Labs had to make this move to adapt to “the different type of technology and support” that developers building on zkSync now require.

He claimed that the operations of these developers have evolved over the years, demanding a different type of technology and support. This is in addition to the increased demand for zk chains.

After a thorough planning exercise, Matter Labs decided that the talent it has at the time, did not meet up with the present need. The layoff is the result of a rigorous review process. With the affected persons out of the company, the firm believes it has the right people in every single role. To make the departure easier on the affected employees, Matter Labs created a severance package.

This new development suggests that Matter Labs could be trying to remain in favor of its developers and the broader ecosystem. This comes barely three months after it received some backlash from its Chinese community. This backlash came as a result of grievance over key leadership decisions.

At the time, the community emphasized their unwavering commitment to transparency and accountability towards their contributors and members.

Beyond zkSync, New Pivot for Layer-2 Protocols

Currently, there is a silent competition between Layer 2 protocols as they all try to outperform each other. These protocols are constantly implementing updates to remain relevant in the ecosystem. Therefore it is little wonder that Matter Labs did a reshuffling of its employees. The real question now remains whether other competing L2 chains will lay off staffs as well.

Last month, Shiba Inu’s Layer-2 scaling solution Shibarium welcomed an auto burning mechanism dubbed ShibTorch. This portal helps to burn base fees paid by users while controlling inflation. This way, it reduces the supply to generate higher value and facilitating incentivization of holders.

Also, Sony partnered with Startale to announces new Ethereum L2 Soneium on Optimism. The development enjoyed support from Astar Network, Alchemy, Chainlink, Circle, Optimism, and The Graph.