Matter Labs Lays Off Staff for the First Time Since Inception

Matter Labs, the company behind Ethereum Layer 2 network ZKSync, is cutting 16% of its workforce in a bid to maintain a leaner team moving forward.

“From day 1, Matter Labs embraced the philosophy of being a lean and focused team committed to a singular mission — accelerating the mass adoption of crypto for personal sovereignty,” wrote Alex Gluchowski, CEO and co-founder of Matter Labs, on Sept. 3. “Staying small and focused enabled us to keep a steady pace of impactful innovation, continuously adapting to changes.”

Gluchowski added that after launching Elastic Chain and ZK Nation, his team decided to re-evaluate strategy, goals, and team composition – which led to the termination of 24 employees.

According to Gluchowski, the company has the funds necessary to endure a multi-year bear market and the team will be looking to “hire the right talent crucial to the next phase of Matter Labs.”

ZKSync Era is a top 10 Ethereum scaling solution, according to L2Beat. It holds $793 million in total value locked, translating to a 2.2% market share, landing it in 9th place.

The project’s native ZK token is down more than 50% since its launch in June and trades at a market capitalization of $368 million, according to CoinGecko.

In more auspicious times for Layer 2s, Matter Labs raised $200 million in a Series C round led by Blockchain Capital and Dragonfly in late 2022. The sum brought the company’s total financing to a whopping $458 million.

The firm caused controversy in June when it attempted to trademark the commonly-used acronym ZK. The Web3 community vilified it for the move, with some of its main competitors like Polygon, Starkware, and Polyhedra “condemning this behavior in the strongest terms possible.”

Several projects also argued that Matter Labs sought to leverage the trademark to guarantee its upcoming token would trade under the ticker ZK – even though Polyhedra’s token already possessed that ticker.