AI drives unemployment in Israel’s high-tech sector

The Employment Service warns that these trends could accelerate as AI tools become more embedded in development and maintenance, prompting some professionals to explore career changes.

By i24 News and Algemeiner

The rapid rise of artificial intelligence (AI) is reshaping Israel’s job market, particularly in the high-tech sector. A report published Sunday by the Employment Service reveals that the number of unemployed tech professionals has more than doubled over the past three years.

As of December 2025, 16,300 tech workers were registered as job seekers, up from just 7,200 in January 2022.

The increase is largely attributed to AI tools capable of automating coding and other repetitive tasks, reducing demand for software developers and systems analysts.

The software sector has been hit hardest. While overall joblessness in Israel fell by 10% since 2022, high-tech unemployment rose 126 percent.

Of the 16,300 unemployed tech professionals, 59 percent work in software—around 9,600 people—with more than half serving as developers or analysts.

Since December 2022, software unemployment has increased 1.75 times, compared to a 1.05-fold rise among mechanical engineers and technicians.

The Employment Service warns that these trends could accelerate as AI tools become more embedded in development and maintenance, prompting some professionals to explore career changes.

Despite this surge in unemployment, the broader high-tech market continues to expand. Job postings rose 15 percent in 2025, from 15,900 to 18,300 positions, providing roughly 112 openings per 100 job seekers.

However, this growth has largely bypassed the software sector, where vacancies grew only 5 percent in the last quarter.

High-tech remains a cornerstone of the Israeli economy, employing 435,000 people, contributing nearly 20% of GDP, and accounting for over half of exports.

Average salaries are high, with tech professionals earning 32,500 shekels per month at the end of 2025—more than double the 13,600-shekel average in other sectors.

Even unemployed tech workers maintain relatively strong earnings, averaging 21,700 shekels.

The crisis is also affecting more experienced professionals.

The share of job seekers aged 35 to 50 increased from 40.5 percent to 44.5 percent between December 2023 and December 2025, showing that mid-career workers are increasingly vulnerable in a market reshaped by AI.