Israeli Tech Sector Needs Different Skills, Not Necessarily Fewer Workers
תומצת מתוך Calcalist על ידי baba
A survey by the Israel Innovation Authority indicates the Israeli high-tech sector needs to focus on specific skills rather than just employee numbers. While overall employment is stable, layoffs vary significantly by sub-sector, and AI's impact is complex. Companies anticipate reduced hiring and potential increases in layoffs, necessitating proactive workforce planning to adapt to evolving skill demands and technological changes.
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- Israeli high-tech needs specific skills, not just fewer workers, according to a new survey.
- Overall employment in tech remains stable, but layoffs differ greatly by sector.
- Artificial intelligence's impact on hiring and layoffs is more nuanced than widely reported.
- Companies predict lower hiring rates and increased layoffs in the second half of 2026.
- Proactive workforce planning focusing on future skills is crucial for the tech industry.
A recent survey by the Israel Innovation Authority and Civan suggests that the Israeli high-tech industry's focus on employee numbers during layoffs might be misplaced. Instead of solely tracking hires and firings, the study, which polled 210 companies employing around 130,000 people, indicates a need to understand the specific skills and roles the industry requires. While overall employment numbers show relative stability, with hiring averaging 8% and layoffs at 2.8% in the first half of 2026, significant disparities exist across sub-sectors. Software companies saw layoffs at 6.6%, contrasting with 1.1% in hardware and 2.7% in pharma and medical fields. This highlights how aggregate data can obscure individual struggles, as a laid-off software employee may not easily transition to a hardware or deep-tech role requiring different expertise.
The impact of artificial intelligence on the workforce is also more nuanced than often portrayed. While about 10% of companies have reduced hiring due to AI adoption, and half of those planning layoffs cite AI's influence, only 7% identify it as the primary reason for workforce reduction. The more significant shifts may be occurring prior to layoffs, through decisions to not open new positions, hire smaller teams, or redefine existing roles. These less-publicized decisions, over time, could reshape high-tech employment.
Looking ahead, over a third of companies anticipate a decrease in hiring in the latter half of 2026, with planned hiring rates dropping from 7.2% to 5.9%. Companies planning significant layoffs expect those rates to rise from 4.1% to 6.4%. This forward-looking data signals a need for proactive workforce planning, focusing on identifying necessary future capabilities, rather than just current headcount.
Companies must now consider which skills will be essential, how to develop or recruit for them, and whether to hire specialists, retrain existing staff, or restructure teams. Lawyer Hila Zilberstein notes that such organizational changes, whether driven by new business strategies or technological shifts, require careful legal consideration regarding employee impact and implementation. The challenge for the tech sector in the coming years will be adapting to the pace of change, ensuring both employees and employers can align their skills and needs with evolving industry demands.