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Matter Labs, a company behind the ZKsync project, a scaling solution for Ethereum, has fired several senior engineers, designers and operators. The ZKsync layoffs have come at a rough time: the company had raised a $450 million round to develop its product, but now employees are walking away. The official reason? An overhaul to a new permissioned privacy chain called Prividium. But the crypto community won’t have it all, and the questions are getting louder.
Quick Facts
| Company | Matter Labs (creator of ZKsync) |
| Who was cut | Senior engineers, designers and operators |
| Reason given | Strategic transition to Prividium, a permissioned and privacy-focused layer 2 solution. |
| Total raised | $450 million |
| Previous layoffs | Yes — also reduced staff in a pivot in 2024 |
| Support offered | Support for affected employees financially and for transition.Financial support and transition support for affected employees. |
| Community sentiment | Divided — excitement over Prividium, anger over funding cuts vs. job cuts |
What Actually Happened?
Matter Labs has officially moved from its previous focus on developing public-facing ZKsync infrastructure to Prividium — an Ethereum-based, privacy-focused blockchain platform designed for financial institutions and fintech. Imagine transactions that are compliant and on-chain for regulated businesses, with the support of zero-knowledge technology.
The ZKsync job cuts were confirmed by the CEO in a public announcement, who took personal responsibility for the decision. His answer: As Prividium grew, the company was seeing much more clearly what its enterprise customers actually needed – and that clarity showed that there was a disconnect between the skills in the current team and the new direction. In the previous build phase, roles were very clear, but are now not as relevant as the company evolves.
He explicitly rejected the notion that the reductions were due to an underperformance problem. “Some of the best people that I’ve ever worked with were released…,” he said, “…they were the best of the best.” According to reports, the employees affected have been provided with financial support for their transition.
The $450 Million Question
It’s time to get uncomfortable. Growing a community is what is being noticed, and Matter Labs has successfully raised a whopping $450 million to develop its product.
The sharpest of the echoes around the web: You raised $450 million to build the product. Where’s the money? “Why are you firing people and making more demands?”
It’s a fair question. But the ZKsync layoffs have put a spotlight on the scrutiny of venture-funded companies, especially when there are as many funds as there are in this case. It’s this very gap that has raised the questions, and they are not the first such questions to be asked of this particular firm. Matter Labs has similarly experienced a round of crypto startup layoffs in 2024, under the pretence of pivoting rather than cutting costs.
Is It a ZKsync Problem or a Web3 Problem?
Honestly? A bit of both. The dismissals come as part of a trend of Web3 companies making man-to-man cuts as they restructure their teams around more targeted product bets in leaner periods — and as part of the bull market dismissals.
| Factor | What It Means for Workers |
| Strategic pivot | Equal roles created for past directions become redundant in no time. |
| Investor pressure | Following the downturn, companies are under pressure to achieve a profitability path. |
| Crypto market volatility | The uncertainty of revenues leaves a company without justification for hiring additional staff. |
| Permissioned blockchain shift | Needs specialised knowledge beyond the creation of a public chain |
| Web3 talent market | Competitive and volatile — out-of-work talent easily picked up. |
This round of crypto job losses isn’t just about companies going under; it’s about companies going astray. While that’s important, it doesn’t make the blow of an effect on workers’ morale any less of a blow.
FAQs
ZKsync is laying off workers while raising $450 million, why?
The official reason is that it’s a strategic shift: the company will be shifting its entire efforts into an institutional privacy blockchain called Prividium, and it’s a different breed of talent. But the community has asked keenly: where did the $450 million go, and why has capital not protected the workforce?
How many people were laid off from the ZKsync team?
It is not known how many will actually be released. It is confirmed that senior engineers, designers and operators will be among those cuts across various functions.
What is Matter Labs’ explanation for the ZKsync layoffs?
The company notes that the changes were made because of the strategy switch to Prividium, which demands a different skill set than ZKsync’s previous public chain projects. The CEO personally took responsibility, and said it was a direction-alignment decision, not a performance issue. It is Matter Labs’ new flagship product, an Ethereum-based Layer-2 blockchain platform for regulated financial institutions and fintech companies to enable compliant, on-chain transactions with privacy.
Did Matter Labs lay people off before?
Yes. The company also trimmed staff in 2024 as part of a previous shift to privacy-focused tools, and as usual, the messaging was on reshaping the workforce in light of new priorities.
Is the layoff trend spreading throughout Web3? Increasingly, yes. Blockchain exiting is one of the trends in the year 2026 which is part and parcel of the general trend. Most of the layoffs in the cryptocurrency sector are because of the shift in strategy by companies to attain profitability.
Key Takeaways
- ZKsync has reportedly laid off some of its top engineers, designers and operators as Matter Labs shifts its focus entirely to Prividium.
- The company has raised $450 million — but the gap between money and jobs has created a backlash in the community.
- The company’s second major restructuring in a few years, after a similar overhaul in 2024.
- Financial aid for those workers who were laid off has been made available to them.
- Matter Labs’ staff layoffs are but one example of a much larger Web3 trend of layoffs that has been happening since 2026 and has been driven by many factors other than the market alone.
- A significant amount of tension currently exists between venture capital investments and the job security of employees.
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