- Matter Labs laid off 24 people, more than 16% of its workforce, amid market changes.
- The company is shifting its focus from general-purpose expansion to niche applications.
- Despite the layoffs, Matter Labs continues to hire for critical engineering and business roles.
Matter Labs, the company behind the Ethereum scaling network ZKsync, announced it is laying off more than 16% of its staff, affecting 24 people.
The announcement by Matter Labs co-founder and CEO Alex Gluchowski on September 3, 2024, marks a significant turning point for the company as it navigates the increasingly competitive landscape of Ethereum Layer 2 scaling solutions.
Matter Labs restructures amid market woes
The layoffs come as Matter Labs reassesses its strategy in the face of changing market conditions and evolving business needs. This follows a large-scale organizational planning exercise that exposed a mismatch between the company’s current talent and the needs of its future strategy.
According to Gluchowski, the decision to downsize was “the most difficult change” he’s had to make in the company’s six-year history.
In announcing the layoffs, Gluchowski said he had informed the affected employees of the layoffs and stressed that the decision was not related to performance. He stressed the need to align the company’s resources with new strategic goals.
Despite the layoffs, Matter Labs is currently hiring for key positions in engineering, business development, and operations, underscoring the company’s continued commitment to innovation and growth despite the workforce reductions.
Shifting focus from general purpose solutions to niche solutions
These layoffs are part of a broader strategic shift at Matter Labs.
In June 2024, the company launched Elastic Chain, a new solution aimed at improving interoperability as the number of teams building custom chains on ZKsync increases. This launch forced Matter Labs to rethink its position in the competitive Ethereum Layer 2 ecosystem, which includes other major players such as Coinbase’s Base, Polygon, Arbitrum, and Optimism.
Gluchowski said Matter Labs may be moving away from its initial focus as a general-purpose Ethereum scaler. Instead, the company is exploring more niche and case-specific applications of its technology, a move designed to better meet user needs and remain competitive in a crowded market.
As Matter Labs reorients itself, the company’s commitment to innovation remains strong. While the layoffs are difficult, they are a step toward aligning its workforce and resources with its evolving strategy for scaling Ethereum.