Key Takeaways
- Over 16,000 hi‑tech workers in Israel have recently registered as unemployed – a three‑fold increase compared with 2022 and the highest figure seen in “normal times.”
- About half of the newly unemployed are software developers with more than eight years of experience, a group that is highly exposed to the rapid spread of artificial intelligence (AI).
- Inbal Mashash, director general of the Israel Employment Service, cites a strong correlation between the rise in job‑seekers and the expansion of AI use across the sector.
- The Employment Service is responding with upskilling initiatives, cooperation with the Innovation Authority, AI headquarters, and the Manufacturers Association, and is seeking to place displaced workers in non‑technological industries such as traditional manufacturing.
- Despite the surge, there remain ≈14,000 open hi‑tech positions and another 4,000 technology‑related jobs outside the sector, suggesting a potential re‑absorption of trained workers.
- Mashash warns that the upward trend in unemployment is likely to continue for several more months before it begins to moderate.
Record Surge in Hi‑Tech Unemployment
Israel’s high‑technology sector, long celebrated as the engine of the nation’s economic growth, is confronting an unprecedented wave of joblessness. According to Inbal Mashash, director general of the Israel Employment Service, more than 16,000 workers have recently registered as unemployed in the hi‑tech field. Speaking to 103FM on Tuesday, Mashash emphasized that this figure represents a record number for normal times and marks a three‑fold increase when compared with the same period in 2022. “That is definitely concerning and indicates a problem,” she warned, underscoring that the current spike is not merely a seasonal fluctuation but a structural shift that warrants immediate attention from policymakers, industry leaders, and training providers.
Who Is Being Hit Hardest?
The demographic profile of those newly out of work reveals a clear concentration within a specific occupational group. Mashash noted that approximately half of the job seekers are software workers, a cohort characterized by deep technical expertise and lengthy tenure—many possess more than eight years of seniority and experience. These individuals sit at the core of the hi‑tech ecosystem, typically engaged in coding, system architecture, and software development. Their high level of specialization, while an asset in stable periods, now renders them particularly vulnerable to rapid technological displacement, especially as firms accelerate the adoption of automation and AI‑driven tools.
Link Between AI Expansion and Job Losses
When pressed on the underlying causes of the surge, Mashash drew a direct line between the rise in unemployment and the expansion of artificial intelligence across the industry. “There is a very strong correlation and connection between the fact that the number of job seekers has risen and the expansion of the expansion of the use of artificial intelligence,” she stated. The observation aligns with broader global trends where AI‑powered code generators, automated testing platforms, and intelligent DevOps solutions are reducing the need for routine programming tasks. For seasoned developers whose skill sets were built around manual coding and legacy system maintenance, the shift can render certain competencies less relevant, prompting a wave of layoffs and a scramble for re‑training.
The Employment Service’s Response
Recognizing that the challenge extends beyond the hi‑tech sector, the Israel Employment Service has mobilized a multifaceted strategy. Mashash explained that “in the era of artificial intelligence, everyone must undergo upskilling, and this is not only about the hi‑tech sector.” The agency’s role, she said, is to view the labor market as a whole, which is evolving at a “very fast pace.” To that end, the Service is partnering with the Innovation Authority, the AI headquarters, and the Manufacturers Association. These collaborations aim to design targeted upskilling programs that equip displaced workers with competencies in AI supervision, data analysis, and emerging tech‑adjacent roles.
Additionally, the Service is pursuing a double‑benefit approach by seeking to integrate these experienced professionals into non‑technological sectors such as traditional manufacturing, logistics, and agritech. By placing workers who possess strong problem‑solving abilities and project‑management experience into industries undergoing their own digital transformation, the initiative hopes to both alleviate unemployment and inject valuable expertise into sectors that are eager to modernize.
Open Positions and Potential Re‑absorption
While the unemployment figures are alarming, the labor market is not devoid of opportunity. Mashash highlighted that there are currently about 14,000 open positions within the hi‑tech sector itself, complemented by approximately 4,000 technology‑related jobs outside the core industry. She expressed optimism that “some of the people who undergo certain training programs will find themselves back in the sector.” This suggests that, with appropriate reskilling pathways—particularly those focused on AI oversight, machine‑learning operations, and hybrid tech‑business roles—a significant portion of the displaced workforce could be re‑absorbed. The existence of sizable vacancies also indicates that demand for skilled labor persists, albeit shifting toward profiles that can work alongside, rather than be replaced by, intelligent systems.
Future Outlook
Looking ahead, Mashash cautioned that the negative trajectory is unlikely to reverse immediately. “We expect there will be another increase in the coming months, and then it will gradually moderate,” she predicted. The anticipated short‑term rise likely reflects the continuation of AI‑driven restructuring plans announced by major firms, as well as the time required for upskilling initiatives to scale and produce measurable outcomes. However, her forecast of eventual moderation hinges on the successful implementation of the training and cross‑sector placement programs currently underway. If those efforts achieve sufficient uptake, the labor market could reach a new equilibrium where human talent and artificial intelligence coexist, preserving Israel’s reputation as a global hi‑tech leader while safeguarding the livelihoods of its experienced tech professionals.
In summary, Israel’s hi‑tech sector is confronting a sharp rise in unemployment driven largely by AI adoption, with senior software developers bearing the brunt. The Israel Employment Service is responding through upskilling, inter‑agency cooperation, and efforts to redeploy talent into traditional industries, all while a substantial number of vacancies remain that could re‑employ workers once they acquire the requisite new competencies.
https://www.jpost.com/business-and-innovation/article-901826