Eigen Labs Cuts 25% Workforce to Focus on EigenCloud Growth

Eigen Labs, a significant player in the Ethereum restaking sector with its EigenLayer project, has announced a reduction in its workforce by approximately 25%. This decision, as stated by CEO Sreeram Kannan, is aimed at redirecting efforts towards the growth of EigenCloud, which was launched just last month. The company has let go of 29 skilled employees, a move Kannan believes will streamline operations towards a unified objective.

The personnel cut, revealed on July 8, 2025, affected a quarter of Eigen Labs’ team, resulting in a strategic shift of resources to current teams. The reorganization is designed to unite the company’s development and infrastructure capabilities. “It’s bittersweet to part with individuals who contributed to our mission with such energy and vision,” Kannan commented.

EigenCloud integrates various aspects including the data layer EigenDA, dispute resolution tool EigenVerify, and execution engine EigenCompute. This integration aims to provide a seamless platform for developers to establish Web2 applications verified through blockchain technology. Eigen Labs emphasizes that this combination offers the adaptability of smart contracts with the ease of traditional cloud solutions.

To accelerate development, a16z, the crypto arm of Andreessen Horowitz, extended their backing by purchasing $70 million more in EIGEN coins recently. The company suggests this capital will allow a focus on refining their market offerings, while the downsized team will concentrate on effective cloud infrastructure.

With this restructuring and financial infusion, Eigen Labs sets its sights on advancing its goals with assured determination and an eye on broader global influence. Key conclusions drawn from the recent moves include the layoff impacting a significant portion of the team, realigning focus. EigenCloud is positioned as a pivotal development blending blockchain and cloud functionalities. Support from a16z strengthens its market positioning and product readiness. Reallocation of resources is crucial for focusing on scalable infrastructure.

Eigen Labs anticipates that these strategic changes will enhance their capacity to meet the ambitious targets set for EigenCloud, enabling the next leap in their evolutionary path. The company confirmed that the decision was not driven by financial hardship, but rather by a desire to consolidate efforts around the infrastructure that it believes will shape the next phase of decentralized computing. The layoffs span multiple departments and roles, reflecting a broad restructuring of the company’s internal resources. Despite the reduction in workforce, Eigen Labs remains well-capitalized, having raised $70 million from venture capital firm Andreessen Horowitz earlier this year. That funding was part of a broader $220 million in total capital raised to date, giving the firm a robust runway to support its revised strategic vision.

Launched recently, EigenCloud is designed to serve as a decentralized compute layer that allows developers to perform off-chain computation with cryptographic verification, tightly integrated with on-chain activity. It expands upon the original premise of EigenLayer by enabling more general-purpose applications to benefit from decentralized trust guarantees. The pivot toward EigenCloud underscores a broader trend in the blockchain space, as companies move beyond token speculation and financial primitives to focus on infrastructure that can support a wide array of real-world applications. Eigen Labs’ move places it in competition with both traditional cloud providers and emerging decentralized infrastructure platforms.

With EigenCloud, the company aims to provide a scalable, secure, and trust-minimized environment for computation and data availability—foundational capabilities for next-generation decentralized applications. By consolidating resources and sharpening its focus, Eigen Labs is betting that the future of Web3 will be built not just on financial rails, but on robust, decentralized compute layers as well. The layoffs are a one-time measure, and no further reductions are planned. Eigen Labs is also providing support to those affected, including three months of base pay and accelerated token vesting for employees with over a year of tenure. Career transition services are also being offered to help former staff land new roles in the industry.