As reported by "Globes" yesterday, the numbers in the latest report by the Employment Service on employment in Israel’s technology sector look surprising. According to the report, the number of jobseekers in the sector in April was 14,961, more than double the number in January 2019 (7,058), and 21% more than in September 2023 (12,355), just before the outbreak of the Swords of Iron war.
On the other hand, there has been no massive wave of layoffs in the core disciplines of Israel’s technology industry, no reports of technology companies collapsing, and the dramatic headlines about an employment crisis in the industry mainly relate to junior workers without experience. In fact, many headlines have been about companies recruiting, for example Nvidia, Microsoft, and Check Point, which continue to publish job ads and to seek to attract talent.
How then does it come about that, while the sense in the market is of reasonable stability, beneath the surface a growing layer of experienced workers is being shed by the industry and not managing to get back into it?
This gap, according to the Employment Service itself among other organizations, indicates a quiet revolution taking place in the sector, a slow, deep process of structural change. For years, the technology industry enjoyed a boom, which reached its peak during the Covid pandemic. Since 2022, however, as the market started to shrink, interest rates rose, and investors became more selective, the sector has gone into another gear, less frenetic and much more cautious. Rather than a dramatic crisis that fells players one after another, what has been happening is a prolonged slowdown that constantly eats away at the workforce. The market has apparently gone from euphoric growth to deliberate selectivity and downsizing. The pendulum has swung the other way, and employers have become cautious and mindful, and hire when there is clear business justification for doing so.
This change particularly affects experienced workers with long service, the mid-layer that finds itself shut out of employment. Those workers with eight to fifteen years’ experience, who until recently were the backbone of development, data, and management teams, in the midst of their most productive years, aged 36 to 45, are driving the rise in the number of jobseekers. Their proportion of the total number of jobseekers in the industry jumped from just 15% in August 2022 to 40% in April this year.
The supply illusion
One of the report’s outstanding findings is liable to confuse anyone trying to understand the reality on the ground. The ratio of vacant positions to jobseekers in technology is still high in relation to the economy as a whole. At least on paper, there are more jobs available for each person seeking work in high tech than in industry, commerce, and services.
That fact is liable to be misleading, because it does not tell the whole story. The detailed picture reveals that many of these positions are very narrowly defined, with precise technical requirements, and sometimes also requiring experience in niche areas. This creates a situation in which tens of thousands of experienced engineers, developers, and analysts could be unsuitable simply because they have acquired their experience in a different technological environment or have spent too much time in managerial roles.
Switching to tangential areas
Not everyone agrees with the picture that emerges from the Employment Service report. Eyal Solomon, head of placement company Ethosia, seeks to put things into some kind of proportion. He says that the official figures do not take account of people who have chosen to go their own way, to work as freelancers, or to join companies in tangential areas such as biotech, fintech, and smart energy. In some of these fields there has been a rise in demand for experienced tech workers. "Employment Service reports do not reflect the whole picture," he told "Globes," "and the demand for high-tech workers continues to rise."
He points out that in the first quarter of 2025 there was a 33% rise in the number of people employed in the sector, and say that a large part of the movement in the market stems from changes made by choice rather than layoffs, with people deliberately moving on to new challenges. He adds that the second half of the year began with a considerable shortage of engineers, particularly in artificial intelligence, hardware, and DevOps.
"There are hundreds of vacant positions that are not reported, among other things because of sensitivity among startups or internal moves to replace workers," Solomon says. The layoffs recorded in the market are not necessarily a result of a slowdown in demand, but arise from streamlining and restructuring, and many people find alternative jobs within a short time. "High-tech continues to be an engine of the Israeli economy, and the headlines don’t always manage to capture the complicated dynamics of the labor market in the sector," he concludes.
Published by Globes, Israel business news - en.globes.co.il - on July 14, 2025.
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