Amid fears of an economic downturn in the United States, high-tech firms have been cutting back, resulting in thousands of Israeli high-tech employees losing their jobs since last March.
Israel’s KAN Broadcaster estimates that some 3,000 workers have lost their jobs in four months while Channel 12 reported that as many as 2,800 have been fired in the past two months.
A decline in high-tech globally could have major consequences on the Israeli economy where high-paid tech workers make up 10% of the labor force.
At the beginning of the week, AID Genomics – a company that deals with the early detection of genetic diseases – fired its entire Israel workforce of more than 400 employees.
This follows a similar move by the U.S. insurance firm Asurion, which closed down its Israeli development center leaving 120 jobless.
In 2013, Asurion purchased Israeli startup Soluto, which previously had been owned by Naftali Bennett who later entered politics and served as the country’s prime minister from June of 2021, until last month.
The decision to shut down came as a complete surprise to the Israeli branch of the company. The company explained that as part of its overall downsizing of the company, the “decision meant we had to let go of Soluto’s talented people and with it the innovative technological capabilities that the site has in Tel Aviv.”
Soluto’s CEO, Merav Oren, said it was a “particularly difficult moment” for her.
“These are people who believe in the company and the product, and together they gave their hearts and abilities every day to create the best product for our users. Over the years, we have gathered the best professionals in their field, who are at the forefront of the technology industry in Israel, and we have maintained a one-of-a-kind culture,” she said.
The news of layoffs this week, in addition to concerns about what will happen with U.S tech firms, has likely set the Israeli industry on edge. According to a report in Haaretz, technology accounted for 16% of Israel’s GDP in 2021 and "high-tech accounts for just over half of Israel’s exports of goods and services."
“What we don’t know is how things will develop in the global economy: is the United States going into a long recession? If it is, it could be the beginning of a real downturn for Israeli high-tech,” said Uri Gabai, CEO of Start-Up Nation Central’s Start-Up Nation Policy Institute. “It’s too early to call this a crisis. Hopefully, it won’t become one.”
The All Israel News Staff is a team of journalists in Israel.