Ethereum Foundation cuts budget 40% and staff 20% in major reset

Ethereum Foundation will slash its operating budget by roughly 40% this year and cut headcount by 20%, a move Vitalik Buterin says is needed to shift the organization toward an endowment‑style model that limits annual spending to about 5% after 2030 [2].

Budget overhaul and staffing changes

Buterin’s X post outlined a plan to reduce the foundation’s annual outflow from roughly 15% of its remaining treasury to about 5% once the end‑of‑decade target is reached. The same announcement coincided with a confirmed 20% cut in headcount, following the resignation of co‑executive director Hsiao‑Wei Wang and bringing the total senior departures since January to nine [2]. The organization also sold 10,000 ETH in an over‑the‑counter deal on May 1, further reshaping its asset base [1].

On‑chain context and funding outlook

The treasury’s ETH holdings have been actively managed: after nearing 70,000 ETH staked earlier in the year, the foundation withdrew 17,000 ETH in late April and another 21,270 ETH in early May, signaling a deliberate rebalancing of liquid versus staked assets [1]. These moves occur amid concerns raised by former contributor Trenton Van Epps that the broader Ethereum development ecosystem could face a “slow‑burning funding crisis” as the Client Incentive Program expires and spending cuts take effect [1].

What to watch

• Price‑sensitive treasury thresholds – monitor ETH price relative to the foundation’s unstaked 38,270 ETH, as large on‑chain sales could affect market dynamics.
• Future staff changes – any further senior departures may indicate additional operational tightening.
• Endowment target milestones – watch for updates on the 5% annual spend goal as the 2030 horizon approaches.

The overhaul marks the most extensive structural shift for Ethereum since the Merge, testing whether a leaner foundation can sustain the protocol’s long‑term roadmap while preserving ecosystem funding.