Following the global slowdown, the Israeli high-tech sector went from record growth to a complete standstill last year, according to a report issued Tuesday by the Israel Innovation Authority and SNPI Policy Institute.
The 2022-2023 Human Capital Report update for the high-tech sector showed a 70 percent increase in layoffs during the second half of 2022, compared to the same period a year earlier.
Small companies and non-tech employees were the most severely affected.
Ominously, the negative trend which began with the global slowdown in 2022 has worsened in the first quarter of 2023, the analysts warned.
Nevertheless, there are bright spots. The Agri-FoodTech and Cleantech sectors ranked second in annual growth rate for the second consecutive year.
Moreover, multinational companies maintained their stability, showing quarterly growth rates of one to three percent, and laid off fewer employees, as compared to local firms.
“This report paints a complex situation of a drastic shift in high-tech employment trends,” said Israel Innovation Authority CEO Dror Bin.
“As in past economic slowdowns, when the volume of private funding and public companies’ valuation drop, so do the rates of high-tech employment.
“The Israeli high-tech is our most important economic resource and the trends described in this report are not conducive to the continued rapid development of the Israeli economy,” he said.
However, Bin added that Israel has experienced similar fluctuations in the economy in the past and has come out strong.
“We must do our utmost to preserve the human capital within Israel, even as we hope for the impending end of the storm we are currently experiencing,” urged Uri Gabai, CEO of the SNPI Policy Institute.