Israeli High-Tech Job Seekers Surge as Industry Growth Slows and Experienced Workers Struggle

The Israeli high-tech labor market is showing signs of slowdown, but the situation is more complex than isolated layoffs. A new report by the Employment Service analyzing changes from 2019 to 2026 reveals a shift in the profile of job seekers and a sustained deceleration in industry employment growth. In May, the number of high-tech job seekers registered with the Employment Service reached approximately 16,300, the highest level outside emergency periods. Their share of all job seekers rose from about 4% in early 2022 to 11% currently. However, the report stresses that this increase began before the widespread adoption of artificial intelligence (AI) and indicates correlation rather than causation.

A key finding is that the rise in job seekers is no longer concentrated among junior employees. While those with up to four years of experience remain the largest group, their relative share is declining. Instead, the sharpest increases are among more experienced workers: since early 2023, job seekers with five to eight years of experience rose by 138%, and those with over eight years increased by 181%. This suggests that even veteran employees, previously considered more stable, are facing greater employment challenges.

The occupational distribution is also shifting, with software workers now making up about half of all high-tech job seekers, a proportion that has been growing since 2021. Nearly 8,000 job seekers come from software development, while other fields such as engineering, sciences, infrastructure, and management represent smaller shares.

Regarding AI's impact, the report notes that software roles highly exposed to AI tools saw an 18% increase in job seekers between 2022 and 2026, compared to only about 3% in other high-tech professions with similar AI exposure. Despite this, the Employment Service cautions against attributing the rise in job seekers directly to AI, as the trend began before ChatGPT's launch and statistical tests found no significant causal link. The main conclusion is a correlation between AI adoption and continued growth in job seekers, especially in software.

The report highlights that the industry is not contracting but experiencing slower growth. In 2025, about 404,000 people were employed in high-tech, nearly doubling over the previous decade. However, since 2023, rapid growth has stalled. Had the previous growth rate continued, employment would be around 461,000 today. The gap mainly reflects a hiring slowdown rather than reduced industry activity. The Employment Service expects the rise in job seekers to continue through summer before possibly stabilizing later in the year.

Employment Service CEO Einav Mishash stated that the high-tech labor market is undergoing profound change, requiring workers at all experience levels to adapt their skills. The agency is expanding training and retraining programs, including placing high-tech workers in technology roles outside the core high-tech sector.