Israeli Employment Service Reports Sharp Rise in High-Tech Unemployment Since ChatGPT Launch

A new report from the Israeli Employment Service reveals a significant shift in the country's labor market following the expansion of artificial intelligence use, particularly since the launch of ChatGPT in November 2022. The data shows that the proportion of job seekers from the high-tech sector nearly tripled, rising from about 4% before ChatGPT's release to approximately 9%, and reaching 11% by May 2026, marking the highest level outside of emergency periods.

Contrary to initial expectations that younger workers would be most affected, the increase in unemployment spans all experience levels. Notably, the number of job seekers with over eight years of experience surged by 181% since 2023, while those with up to four years of experience increased by 43%. By May 2026, there were around 16,300 unemployed high-tech workers, a historic peak for a non-emergency period, with half employed in software professions.

The report highlights that software workers with high exposure to AI tools saw an 18% rise in unemployment since 2022, whereas other high-tech professionals with similar AI exposure experienced a more moderate increase of about 3%. Inbal Mashash, CEO of the Employment Service, emphasized the need for a deep restructuring of the labor market, stating, "In a changing market, we must constantly monitor trends, prepare accordingly, and lead the development of Israel's human capital." She added that the Employment Service is already working on programs to help high-tech workers reintegrate into the workforce, including roles in technology outside traditional high-tech companies, underscoring that "in the era of artificial intelligence, everyone must undergo scaling up."