The bubble bursts: Sweeping layoffs rock Israel’s hi-tech scene

According to site tracking layoffs, some 2,000 Israeli tech workers have been fired since early May.

By Lauren Marcus, World Israel News

After several full-speed-ahead years for Israel’s hi-tech sphere, which remained largely economically unaffected during the coronavirus pandemic, companies that were once desperate to recruit new employees are now laying off large swathes of their workers.

Israeli hi-tech “unicorns,” a term designating a company valued at $1 billion or higher, have dramatically shifted from hyper growth phases to terminating their employees, both abroad and within Israel, in droves.

Next Insurance, LightTricks, eToro, Wix, and Playtika are some of the unicorn companies that have had to let employees go in light of the global economic recession, terminating some 17 percent of their workforce on average.

Several of those companies had only recently announced millions of dollars in investment from venture capital funds, indicating how quickly the tide has turned. A record $10 billion in investment was raised by Israeli start-ups in the first half of 2022 alone.

The layoffs have become so widespread that hi-tech consultant Rom Shiri started a website tracking the phenomenon, breaking down the firings by company size, percentage of workforce let go, the company’s valuation, and other criteria.

According to Shiri’s site, at least 2,000 employees of Israeli hi-tech companies have been fired since the beginning of May.

Several start-ups, including Avo, BeyondMinds, Chameleon Security, and Ace Labs, have completely shut down their operations in Israel and fired all of their employees.

A number of foreign companies, such as Chinese e-commerce giant Ali Baba, have also shuttered their Israeli offices and research and development centers.

The shift to cutting down on expenses comes as a stark departure from the indulgent holiday parties, celebrations at the end of fundraising rounds, and even company-sponsored exotic getaways for employees that had become par for the course in the industry.