AI Drives Historic Surge in Israeli High-Tech Unemployment to 11% by May 2026

A new report from the Israeli Employment Service reveals a significant rise in unemployment within the high-tech sector, linked to the expanding use of artificial intelligence (AI). Since the launch of ChatGPT in November 2022, the unemployment rate among high-tech workers has nearly tripled, climbing from about 4% to 11% by May 2026. In May alone, 16,340 high-tech workers were registered as unemployed.

The increase is especially pronounced among veteran employees. While unemployment among workers with up to four years of experience rose by 43% since 2023, those with over eight years of experience saw a staggering 181% increase. Software professionals, who now make up half of the unemployed high-tech workforce, experienced the most significant impact. The number of unemployed software workers with high AI exposure increased by 18% since 2022, compared to a 3% rise among non-software high-tech workers with similar AI exposure.

Inbal Mashash, CEO of the Employment Service, emphasized the need for proactive adaptation to these trends. She stated, "In a changing market, we must constantly monitor trends, prepare accordingly, and lead the development of Israel's human capital." Mashash also highlighted ongoing efforts to help displaced workers transition into new roles, including integrating high-tech unemployed workers into tech positions in non-technology sectors. She noted this approach benefits both the workers and the broader Israeli economy, stressing that "in the era of artificial intelligence, everyone must undergo scaling up."