Living on 13,000 shekels in unemployment benefits, inside the upheaval in Israeli tech

Several prominent tech companies cut staff this week and sent thousands of employees home. In all of the announcements, the impact of AI was cited, and some are convinced that is true and only the beginning. Others note that each company had other issues in the background, and that even amid the upheaval and change there are still hirings and growth, just in different places. Employees are talking about a sharp shakeup, rapid layoffs, rising competition and fear of unemployment benefits that are tens of percent below their salaries. It seems that only the most prominent talents feel relatively protected, while the rest struggle for the next job.

When A., a software developer, arrived at Wix last Monday, she did not imagine that by the end of the day she would find herself out of the company. Shortly afterward, Globes published a report about Wix’s intention to lay off 800 to 1,000 employees. “And then the chaos started,” she says. “From the moment the article was published, everyone waited to see who would be fired, and wondered how management had not told us anything. Before this move, there had been a small layoff wave at Wix that nobody knew about and that was done behind the scenes, and we thought it was over. It was a surprise.”

The surprise quickly turned into a wave of summons to hearings. “We had four days of anxiety, and on Thursday 80% of those laid off were invited to a hearing. My direct manager told me on Zoom that I was among them.” Shortly afterward, a WhatsApp group for laid-off employees was opened, and today it already includes hundreds of Wix workers. They share links to open positions and talk about their hard feelings. “There are women and men there who were in reserve duty, and employees who have already been at Wix for ten years, the company’s heavy hitters. Everyone is pitching in to help and using every possible connection.”

Those who do not quickly find work will have to rely on unemployment benefits from National Insurance, and that means a dramatic drop in income compared with average tech salaries. Thus, if an employee previously earned about 30,000 shekels gross, they will have to get used to living on an allowance of 12,670 shekels, 42% of their salary. If the salary was 40,000 shekels a month, the drop is to unemployment benefits of about 13,769 shekels a month, 34% of the salary.

“I have a mortgage and two small children, and my husband works in low-tech and earns less than I do,” says A. “If I do not find a job quickly, it will significantly shake us. There is a lot of willingness to help in the group, and both current and former Wix employees are using every possible connection to help those laid off. But the atmosphere is difficult.”

The financial hardship can seemingly be bridged for now by severance packages, but problems are also emerging there. “Wix promised it would give each employee two weeks of compensation for every year, up to a ceiling of nine years,” A. claims. “These are very low severance terms compared with what other companies that laid people off gave. They also are not giving much support, two emotional support sessions.” Wix did not respond to the claims.

Thousands of people have been laid off in recent times from a string of prominent companies in one of the hardest waves the Israeli tech sector has known: Wix announced layoffs of about 20% of its workers; Amdocs announced that it would lay off about 10% of its global workforce, which according to estimates will include hundreds of employees in Israel; payments giant PayPal said it was preparing to lay off dozens of employees in Israel; Israeli fintech company Rapyd said it was preparing for another round of layoffs; and Jerusalem-based Lightricks, known mainly as the developer of the Facetune app, announced the layoff of 75 employees, 55 of them in Israel.

“In the days of the layoff announcements, the feeling in the market was really one of mourning,” says Bat Sheva Moshe, a tech entrepreneur who heads an initiative to help laid-off employees find new jobs through an online community she founded during the coronavirus pandemic, connecting workers and employers. “Company after company announced, and there was a sense of momentum. So I posted and asked laid-off workers and employers to contact me. A lot of employers reached out saying, ‘We’re hiring,’ and on the other side a lot of workers looking for their next role.”

Alongside the jobs flowing to her, Moshe also feels optimistic. “It is true that there are many companies laying people off today, because we are at a turning point in the economy, especially in tech, but there are also many new companies hiring. Will all the laid-off workers find work quickly? No. There are the super-talents, who are calm and will quickly find another place, but there is a critical mass of workers who have just entered a market into which several giant companies have suddenly laid off thousands of people, and they are very worried. It also puts workers in other companies who were not laid off into a panic.”

According to Moshe, the laid-off workers who speak with her are above all confused. “On the one hand they are stunned, because they did not think they would be laid off. On the other hand, everyone knew there would be layoffs. It is a paradox. They tell me, ‘It was obvious there was going to be a wave, I just did not think it would be this big.’”

Was it expected? “Anyone who did not understand that a layoff wave was coming either does not understand business or is burying their head in the sand, because companies in the economy are undergoing upheaval in their business model, in their very business essence, alongside ecological factors like the dollar-shekel exchange rate, which was only a catalyst. We have been talking about this event in the community for two years. Anyone who did not understand that should ask themselves where they live.”

The reasons that drove the current layoff wave were varied. But all the announcements mentioned the artificial intelligence revolution as one of the reasons for the cuts, or said, “we need to adapt to the new era.” Rapid CEO Eric Shtilman, for example, wrote to employees that the company was “restructuring to adapt to a fundamental change in the business model,” and added that Rapyd now operates as an “AI-driven company.” He also wrote that integrating AI into the organization’s core systems allows it to operate faster, with greater accuracy and more efficiently.

Wix CEO Avishai Abrahami explained in a letter to employees that the strengthening of the shekel against the dollar, while the company’s revenue is mainly in dollars, created “structural pressure” on the company’s operations, but also added that the development of AI requires Wix to become a “faster, leaner and flatter company.” Other companies that announced cuts over the past year also spoke about “adapting to the AI era,” and the meaning is clear, fewer employees and greater reliance on automation.

These statements sparked a heated dispute: how much is AI really responsible for the latest layoffs? In the WhatsApp groups of laid-off workers and on social media, a debate has erupted between those who say artificial intelligence is just an excuse and those who believe not only is it the reason, but the revolution is still expected to cut many more jobs.

D., a developer laid off from a small startup a few months ago and since then unable to find work, is sure that in her case the layoffs were due to AI. “I worked for a period in a tech company and was laid off in a big wave. At the second startup too, I was laid off because of cuts. Each time they talked about AI. And indeed, when I went out to the market I discovered there are almost no jobs in my field, and every new job posting is flooded with applications. A year ago there were more listings. Developers are moving out of the role and are not looking for a replacement. The feeling is that artificial intelligence has replaced us.”

Dr. Yishai Mor, head of the Artificial Intelligence and Education program at Beit Berl Academic College, believes AI is indeed creating an earthquake in the labor market. “The junior crisis is only the beginning,” he says. “Entire fields in the industry are going to disappear, and others will emerge in their place. Entry-level jobs are disappearing while demand for skilled workers is rising. There are fewer development, service and marketing jobs and more product jobs.

“I am seeing mass layoffs in tech companies, alongside an increase in startups dealing with AI and hardware. At the same time there will be new phenomena, such as a one-person startup. Today different skills are required than before, and that makes initial integration into the market very difficult. This can be a huge opportunity, but if we do not prepare properly, it will be a painful blow.”

Shiri Wax, CEO of the tech recruitment firm GotFriends, also agrees that AI is playing a more significant role in this wave. “Many companies in Israel are going through structural changes and AI implementation has become almost a mandatory practice in almost every field. Its direct impact is what distinguishes the current wave from previous waves, which were mainly indirect and stemmed from optimization, streamlining or economic changes.

“The estimates are that 5% to 10% of the workforce in the tech market may find themselves without work this year, including seniors and managers, not just juniors, mainly candidates who are unable to adopt AI technologies. Large public tech companies have seen a decline in demand. The layer of development managers also needs to adapt to the new requirements.”

But not everyone agrees with the theory. “Our direct managers told us the layoffs were because of AI, but it is clear to everyone that this is just an excuse,” says one of the Wix employees laid off. “The company got into abnormal financial trouble because it made the wrong move, and we all paid the price. They tried to blur that, tried to sit on panels and sell employees and investors that business was as usual, but in the end management made the wrong decisions and we, the employees who sacrificed and gave of our lives, are absorbing the result.”

This is not only a voice heard among the laid off. Nvidia CEO Jensen Huang also does not think AI is responsible for the reduction in the number of jobs. “People talk about reducing the number of jobs, that is nonsense. Companies are hiring more engineers to produce more,” he said at the Computex computing conference in Taiwan this week. “Companies understand that software developers are increasing productivity with AI and are hiring more engineers. The basic processing unit for AI, tokens, is profitable and in high demand. With 30 million programmers making a living from software development, AI increases their output from $3 trillion to $9 trillion, and that explains the rise in the number of jobs.”

Torsten Slok, Apollo’s chief economist, believes not only that AI is not the cause of the layoffs, but that artificial intelligence will increase the number of jobs and raise wages. In a recent post on his blog, the economist wrote that there is “zero evidence of job loss because of AI,” relying on ADP’s national employment report, one of the most important employment reports in the United States.

“In no company was it claimed that the layoff process was happening only because of AI. Each company had its own objective reasons,” says Limor Kedron, VP of HR at data collection company Bright Data. “AI is one of the fastest-growing fields in the world, and in many companies it is דווקא leading to hiring. We, for example, are hiring even more because of it, and there are other companies like us. Demand in this field keeps growing. In the end every new field also creates work, it does not only take it away.”

Kedron is not alarmed by the situation. “It is part of the waves that happen in the tech world over the years, some more severe and some less. Streamlining is nothing new, and within this period there are also companies that are hiring. It is not that the economy has collapsed. Even the companies that laid people off are still successful and at some point will resume hiring.

“Because thousands of people entered the job market all at once, it created pressure among the laid-off workers, who may feel there is competition for every job. But the market in Israel is very developed, growing all the time, and there is still a shortage of people in it, mainly engineers. In Israeli tech, the supply of workers is low compared with the number of companies, and there is competition here for every head, especially for good people.”

Kedron says her company is currently hiring 120 employees in Israel, and since the beginning of the week it has been flooded with inquiries. “When the layoff wave started leaking into the market, about two weeks ago, we personally contacted people we know so they would connect us with their laid-off employees, high-quality people. We also receive a lot of resumes from LinkedIn and from personal acquaintance. If I do not have anything to offer, I pass them on to other HR managers I know, so they can see what they have.”

But not everyone gets lucky, and finding a new job can also take months. “It does not always happen quickly, but most good tech people eventually find their place again,” says Wax. “A job search process can take between one month and half a year for candidates with three years of experience or more. Of course, anyone combining professional experience with an understanding of AI tools today enjoys a significant advantage.”

According to her, “both veterans and younger workers have opportunities, but the market has become more selective. Veterans have the advantage of experience, leadership and familiarity with complex systems. Younger workers have the advantage of flexibility, quick learning and adoption of new technologies. Those who struggle more are employees whose skill set has not been updated in recent years. Those who understand how to build AI agents, who know how to take technological capabilities and implement them with clients, are the candidates companies will run after even in a period of upheaval.”

Classic management and technology experience is no longer enough in the new market to lead a team. “They no longer emphasize the programming languages the candidate is experienced in, they check which AI tools they work with, how they integrate AI into development processes, and how they use them to speed up the team’s delivery and productivity,” the recruitment CEO says. “The ability to translate technology into business value, experience in solution engineering, architecture management, complex problem solving and code review, these skills have become decisive in hiring decisions and provide the highest job security.”

A. feels this change in the market firsthand. “Although the layoffs are not yet final, I have already started looking for work and I am already in several active processes,” she says. “I feel there are companies hiring and there is a lot of response, but that needs a caveat. The market is turning, and the expectations of people are completely different and much higher than they were before.

“People applying for positions need to sit down and study proactively so they can really get through the screening processes for these jobs, including testing their abilities in the AI field. Even if you come with proven experience at an excellent company, it is not always simple to get through the new hiring processes.”

This week, at an interesting moment alongside the accumulating layoff announcements in tech, the Israel Innovation Authority published its annual report on the “State of High Tech 2026.” The report refers to analysis of 2025 data, but it paints a much more optimistic overall picture than the feelings circulating in the industry over the past month. The data reflect recovery and a return to a growth trajectory in the sector, after two years of slowdown in Israeli tech.

According to the report, despite a complex security and economic environment, the sector continued to serve as the Israeli economy’s main “growth engine.” High-tech output posted impressive growth of about 8.2%, reached a record 58% of exports, and contributed about 50% of the growth of the entire economy. These figures are joined by a 2025 rise in capital raising by Israeli tech companies of about 30% compared with 2024, growth in the number of new tech companies from about 750 to about 775, and a record year for exits with a total value of $84 billion in mergers, acquisitions and IPOs.

At the same time, the local ecosystem continued to grow with the entry of additional international companies into Israel, and with a continued rise in the volume of foreign companies acquired by growing Israeli tech companies, 81 acquisitions in 2025. The recovery was not only quantitative, but also reflected a change in the growth engines of Israeli high tech. While in the peak years of high tech, 2021 and 2022, software development and tech services led growth, 2025 was marked by renewed growth in hardware sectors.

After two years of slowdown in overall high-tech output growth in 2023 and 2024, over the past year those hardware companies led the growth, with output rising by about 16 billion shekels, 20.7%, a dramatic jump compared with previous years. This trend was also reflected in the employment mix, with growth of about 8.9% in workers in hardware sectors, while software services remained stable.

How do these data fit with the layoff wave? Wax believes there is “no real contradiction.” לדבריה, “Israeli high tech is indeed in a trend of recovery and growth, high-tech output has grown, capital raises have soared and exports reached a record. Dozens of new startups are opening thanks to the AI revolution, and we are hiring for them. Many of them are still under the radar.

“At the same time, we are seeing a layoff wave that stems less from crisis and more from structural change. Companies are reexamining which roles they need in the AI era, streamlining teams and looking for employees who create more value with fewer resources. And if we did not have enough troubles, there are also cases in which the dollar exchange rate is causing global companies to consider moving activity to cheaper countries.”

Dror Bin, CEO of the Israel Innovation Authority, is also reassuring. “Layoffs are always a very difficult event for the workers affected by them, and this should not be taken lightly. However, it is important to look at the bigger picture: alongside the companies making adjustments and reducing staff, there are also many companies today that continue to hire employees and expand operations,” he says. “The rapid changes in the dollar exchange rate and the adoption of artificial intelligence are creating a turbulent transition period that requires companies to adapt to the new reality.”