Israeli High-Tech Human Capital Report

May 22, 2023

After two years of peak growth that started in mid-2020, in mid-2022 the Israeli high-tech industry entered a period of slowdown, and in the first quarter of 2023 we see indications that this trend is even worsening.

The global economic slowdown led to a decrease in the growth rate of high-tech employment, which worsened throughout 2022, reaching a negative growth of -0.2% in the number of employees in the last quarter. The sharp transition from the peak period of 2021 to a global slowdown affected the entire industry and changed it from an "employees' market" to an "employers' market". An indication of this is the number of voluntary resignations - where employees left their job at one company, assuming they would find work quickly and under improved conditions at another company - which dropped dramatically from 11% in the second half of 2021 to 4.7% in the second half of 2022. The rate of layoffs rose from 2.6% in the second half of 2021 to 4.4% in the second half of 2022. It is evident that the first victims of the wave of layoffs were small companies and workers in non-technological occupations.

Nevertheless, and despite the extensive media attention covering the 2022 layoffs, it is important to keep in mind that these layoff rates are not unusual in the Israeli High-Tech sector. In fact, they are nearly similar to the multi-year average of the last decade.