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Israeli Tech Sector Faces Contradictory Trends Amid Global AI Shift

Microsoft is cutting dozens of jobs at its research and development center in Israel as part of a global organizational restructuring. Affected employees were notified on Monday, with approximately 50 workers in the Copilot Studio division summoned for pre-dismissal hearings. The final number of layoffs remains indefinite, as Microsoft is exploring options to reassign some of the affected staff to alternative positions within the company.

12 newsrooms · 3 languages · since 12 Oct, 16:16

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Israeli Tech Sector Faces Contradictory Trends Amid Global AI Shift — Illustration by baba

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What happened

01Microsoft is cutting dozens of development jobs in Israel as part of a global organizational restructuring.
02Approximately 50 employees from the Copilot Studio division, which develops AI business automation agents, are affected.
03Affected employees were summoned on Monday for pre-dismissal hearings, with about half expected to remain in new roles.
04Microsoft Israel employs around 3,000 research and development personnel across six local sites.
05The restructuring coincides with Ohad Yassin replacing Michal Blumenstyk-Broverman as director of the Israeli R&D center.
06The timeline for the layoffs could begin as early as Monday evening, depending on global reporting requirements in the United States.
07Microsoft previously laid off 4,800 employees globally in July 2026, primarily from its Xbox gaming division.

The restructuring primarily impacts the Copilot Studio group, which develops a platform for building artificial intelligence agents and automating business processes. Microsoft Israel employs around 3,000 R&D personnel across six sites, including its largest campus in Herzliya. The changes coincide with a leadership transition at the Israeli center, where Ohad Yassin is succeeding Michal Blumenstyk-Broverman as director.

Microsoft stated that it continuously evaluates its operations and organizational structure to adapt to changing needs and challenges, which involves team adjustments and difficult decisions directly affecting employees. The company pledged to support those affected with sensitivity and respect. The move follows previous global workforce reductions, including the layoff of 4,800 employees in July 2026, which primarily impacted the Xbox division.

Summarized by baba from the reports of 9 newsrooms. Updated 12 Oct, 20:32

Latest report: TheMarker. Read TheMarker’s original