Matter Labs Axes 16% of Staff, Cites Right People for the Right Roles

Alex Gluchowski, CEO and co-founder of Matter Labs, announced on 3 September via X (formerly known as Twitter) that the company was undergoing a restructuring and reducing its workforce by 16%.

He described this move as "the hardest change" he's had to implement in the company's six-year history.

Gluchowski explained that Matter Labs, the creator of the Ethereum scaling solution ZKsync, has always performed best with a smaller, agile team.

The decision to restructure was made to meet the demands of a rapidly evolving market.

He explained:

“Our market environment and business needs have changed significantly over the course of this year…We went through a large org planning exercise, and it became clear that the talent and roles we have today do not perfectly match our needs. We then reviewed every single role in the company to make sure that we have the right roles and people in the right place, to remain agile and effective.”

After a comprehensive planning process, it was determined that the current talent pool did not align with the company's present needs.

The layoffs were the result of a meticulous review process.

With the affected individuals out of the company, Matter Labs is confident it now has the right people in every role.

Matter Labs president Nana Murugesan also noted:

“Unfortunately, this learning curve isn't always perfectly linear. Organizational complexity has a tendency to accumulate over time […] We are ensuring that we have the right roles and people in place to be effective in accomplishing our mission.”

Murugesan, who joined Matter Labs in April, underscored that the decision was made to maintain a lean operation:

“Matter Labs has embraced Ethereum philosophy, including the philosophy of subtraction. We concentrated on a single mission, which is about accelerating the mass adoption of crypto for personal sovereignty and staying lean.”

More specifically, Gluchowski noted the changing role of Matter Labs within the increasingly decentralised ZKsync ecosystem:

“We see that many teams building on ZKsync Era now require a different type of technology and support than they had previously. At the same time, we see a big increase in demand for ZK Chains. The role of Matter Labs in the decentralized ZKsync ecosystem has evolved, too. The launch of the Elastic Chain and ZK Nation was the right moment to re-evaluate our strategy, goals, and team composition.”

He observed that the operations of these developers have evolved, necessitating different types of technology and support, along with a growing demand for zk chains.

Matter Labs presented the layoffs as a strategic response to the evolving needs of teams building on ZKsync, one of the many Ethereum scaling networks designed to attract users with lower gas fees and faster transaction speeds.

Affected employees were already notified of their termination, which, according to the CEO, was in no way related to job performance.

To ease the transition for the affected employees, Matter Labs has offered a severance package that includes three months of pay, four months of health care, full vesting of company shares through the effective termination date, and career support.

The CEO concluded with an optimistic outlook, highlighting the launch of approximately 12 blockchain projects on ZKsync's Elastic Chain ecosystem this year and ongoing development of ZKsync Era by third-party developers.

This strategic move suggests that Matter Labs is committed to staying in favour with its developers and the broader ecosystem.

Matter Labs CEO Alex Gluchowski Actively Helping Displaced Employees With New Opportunities

To help affected people transition to new jobs, Gluchowski has been actively referring them to new opportunities.

He created a form with a list of the affected talent so it will be easier for potential employers to refer to.

Matter Labs Still Hiring Despite Layoffs

A Matter Labs spokesperson confirmed that the layoffs impacted 24 employees, reducing the company's total headcount to 126.

The spokesperson declined to provide further details on which departments were affected by the layoffs.

Despite the reductions, Matter Labs is actively recruiting for critical roles in engineering, business development, and operations, as described by Gluchowski.

Is Matter Labs Planning to Reposition Itself as Layer 2 Protocols Try to Outdo Each Other?

A quiet competition is brewing among Layer 2 protocols, each striving to outpace the others through constant updates to maintain their relevance in the ecosystem.

It is in this context that Matter Labs' recent employee reshuffling makes sense.

The pressing question now is whether other Layer 2 chains will follow suit with similar layoffs.

In this crowded landscape of Layer 2 and sidechain scaling networks—featuring prominent players like Coinbase's Base, Polygon, Arbitrum, and Optimism—Matter Labs seems to be rethinking its strategic position.

Gluchowski highlighted that the launch of the Elastic Chain prompted a comprehensive reassessment of the company's strategies, goals, and team structure.

This shift suggests that Matter Labs may be moving away from positioning itself as a general-purpose Ethereum scaler, instead focusing on more niche, case-specific applications to remain competitive.