ZKsync’s Matter Labs cuts 16% of workforce in restructuring process

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Alex Gluchowski, CEO of Matter Labs announced today, the company is laying off about 16% of its team. The firm is behind the ZKsync Era Ethereum layer-2 (L2) blockchain.

Gluchowski explained in a message to his team that Matter Labs was “restructuring the organization” and that changes in the market environment and business needs led to the decision.

While he didn’t elaborate, the Matter Labs CEO said that many teams deploying applications on ZKsync Era infrastructure “now need a different kind of technology and support than they had before.”

Furthermore, following the launch of his blockchain and governance entity ZK Nation, Gluchowski said it was time to reevaluate Matter Labs’ goals and structure.

“We went through an extensive organization planning exercise and it became clear that the talent and roles we have today are not a perfect fit for our needs,” he added.

Competitive landscape

According to L2Beat DATAZKsync Era fails to keep up with the pace of other Ethereum L2 blockchains. Its Total Locked Value (TVL) stands at $793 million, making it the eighth largest Ethereum L2.

Moreover, the on-chain trading volume in the ZKsync era has decreased since May, reaching just over $500 million in August. In particular, zero-knowledge proof-of-concept accumulation did not make it to the top 10 blockchains in April’s monthly trading volume.

Thus, the L2 competitive landscape could be one of the reasons why Matter Labs decided to cut costs and reevaluate its approach to the decentralized finance (DeFi) ecosystem.

Despite the news, the ZK token price did not seem to react negatively to it as it fell by 3.37% in the last 24 hours. This correction aligns with a broader market move as Ethereum (ETH) falls 3% over the same period, followed by a 2% correction from Optimism’s OP and a 3.1% cut by Arbitrum’s ARB .

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