ZKsync Builder Faces Backlash After Layoffs

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Matter Labs, the core developer of Ethereum Layer-2 scaling solution ZKsync has laid off part of its workforce as the company sharpens its focus on Prividium, its privacy-focused blockchain platform for regulated financial institutions. CEO Alex Gluchowski said the restructuring reflects the company’s evolving product strategy and not the quality of the affected employees. He added that Matter Labs is now fully committed to enterprise blockchain infrastructure with privacy at its core.

Matter Labs Refocuses Around Prividium

Announcing the decision in an X post on June 16, Gluchowski said Matter Labs began pivoting toward regulated financial institutions in 2024, with that effort eventually becoming Prividium.

According to him, feedback from enterprise customers changed the company’s understanding of what skills and expertise were needed to deliver the platform, which made some existing roles less aligned with its current priorities. Gluchowski wrote:

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“Today we reduced the size of the Matter Labs team. This was my decision, and I want to explain it.”

He emphasized that the layoffs weren’t related to employee performance, and described those leaving as some of the strongest engineers, designers, and operators he has worked with. Matter Labs said affected employees have received financial support and transition assistance, and the company also published an opt-in talent directory for prospective employers.

Prividium is a privacy-focused, permissioned blockchain infrastructure aiming at enterprises, fintech companies, and regulated financial institutions that seek compliant on-chain settlement powered by zero-knowledge technology.

At press time, ZKsync’ ZK token was changing hands at the price of $0.01192, up 5.5% in the last 24 hours and gaining 3.6% across the past seven days, but down 21.4% over the month, per the latest chart information.

Community Questions Funding and Strategy

The announcement prompted mixed reactions across the crypto community.

Though some users welcomed the stronger focus on enterprise infrastructure, others questioned why layoffs were necessary after Matter Labs previously raised approximately $450 million in funding.

One prominent reply asked where the investment capital had gone and why the company was both reducing staff and seeking additional funding.

The restructuring also follows an earlier workforce reduction during Matter Labs’ previous strategic pivot toward privacy-focused blockchain products. Gluchowski maintained that the main driver for the latest changes was the company’s long-term product direction and not short-term cost-cutting, and argued that serving regulated financial institutions requires a different mix of expertise than earlier phases of ZKsync’s development.