Why the Ethereum Foundation Is Cutting Its Budget and Reducing Staff ???
The Ethereum Foundation, the organization that supports the development of the Ethereum blockchain, has announced significant changes to its operations. According to a recent statement from Ethereum co-founder Vitalik Buterin, the foundation plans to reduce its annual budget by around 40% and cut 54 jobs as part of a long-term financial strategy.
The decision marks one of the biggest organizational changes in the foundation’s history. The goal is to create a leaner and more sustainable structure that can support Ethereum’s growth for many years to come.
Budget to Be Reduced Significantly
Vitalik Buterin revealed that the Ethereum Foundation wants to lower its yearly spending over the coming years. Currently, the organization spends around 15% of its remaining treasury each year. The new plan aims to reduce that figure to approximately 5% annually by the year 2030.
This approach is similar to an endowment model, where an organization carefully manages its funds to ensure long-term financial stability. Instead of spending large amounts each year, the foundation plans to preserve more of its resources and use them more efficiently.
According to Buterin, these changes are necessary to help the Ethereum Foundation remain financially strong while continuing to support research, development, and innovation within the Ethereum ecosystem.
Workforce Reduction Affects 54 Employees
Alongside the budget cuts, the Ethereum Foundation confirmed that it will reduce its workforce by 20%. This means that 54 employees will leave the organization.
The foundation stated that the decision was difficult but necessary as part of its restructuring efforts. The layoffs affect approximately one-fifth of the organization’s total staff.
Many of the employees impacted by the decision have contributed to Ethereum’s development for several years. Their work has played an important role in improving the blockchain network and supporting the broader Ethereum community.
A Challenging Year for Leadership Changes
The budget cuts and layoffs come during a period of significant leadership changes within the Ethereum Foundation.
Earlier this month, Co-Executive Director Hsiao-Wei Wang resigned from her position. Her departure added to a growing list of senior leaders who have left the foundation since the beginning of 2026.
Reports indicate that nine senior figures have left the organization since January 2026. These departures have raised questions about the foundation’s future direction and leadership structure.
Before Wang’s resignation, fellow Co-Executive Director Tomasz Stanczak also stepped down from his role in February 2026. As a result, the foundation has had to reorganize its leadership team to ensure smooth operations.
New Responsibilities for Existing Leaders
Following these leadership departures, board member Bastian Aue has taken on additional responsibilities. He is now helping oversee the foundation’s daily operations during the transition period.
The organization hopes that the leadership adjustments will provide stability while it implements its new financial and operational strategy.
The Ethereum Foundation has emphasized that despite the changes, its commitment to supporting Ethereum’s development remains unchanged.
Departure of Key Researchers
The foundation has also seen the departure of important technical contributors. One notable example is researcher Dankrad Feist, who left the organization last year.
Feist moved on to work on Tempo, a stablecoin-focused blockchain project associated with Stripe. His departure was viewed as a significant loss because of his contributions to Ethereum’s technical development.
Vitalik Buterin openly acknowledged that losing experienced team members is not easy. In his blog post, he expressed appreciation for the work of former colleagues and recognized the value they brought to the organization.
Buterin Acknowledges Difficult Decisions
In his statement, Buterin admitted that the restructuring process involves difficult choices. He noted that many talented engineers and researchers who have dedicated years to Ethereum’s success will no longer be part of the foundation.
He stressed that the decision was not made lightly and that the organization understands the impact these changes will have on employees and the broader Ethereum community.
At the same time, Buterin believes that building a more efficient and financially sustainable organization is essential for Ethereum’s future.
Focus on Long-Term Sustainability
The Ethereum Foundation’s new strategy reflects a growing focus on long-term sustainability rather than short-term expansion. By reducing spending and streamlining operations, the organization hopes to preserve its financial resources while continuing to support innovation across the Ethereum ecosystem.
Ethereum remains one of the world’s largest blockchain networks, powering thousands of decentralized applications, smart contracts, and digital asset projects. The foundation believes that careful financial management will help ensure it can continue supporting the network for decades to come.
The Ethereum Foundation is entering a new phase with a 40% budget reduction and the elimination of 54 jobs. The move is part of a broader effort led by Vitalik Buterin to create a leaner and more financially sustainable organization.
While the changes come with challenges, including leadership departures and workforce reductions, the foundation believes the strategy will strengthen its long-term position. As Ethereum continues to evolve, the organization hopes that these difficult decisions today will help secure a stable future for the network and its global community.
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