Israel sees decline in hi-tech workforce for first time in decade: report

IANS April 7, 2025 265 views

Israel's hi-tech sector has experienced its first workforce decline in a decade, with employment dropping by 1.2% in 2024. The reduction stems from multiple factors including global economic challenges, domestic judicial reforms, and ongoing regional conflicts. Despite the workforce shrinkage, research and development positions are increasing, highlighting the sector's resilience and evolving nature. Experts recommend stabilizing the business environment and creating incentives to prevent talent migration and encourage skilled professionals to return.

"Policy measures for the return of these employees to Israel should be considered" - Israel Innovation Authority Report
Jerusalem, April 7: The number of employees in the Israeli hi-tech sector recorded its first decline in a decade in 2024, according to a report published by the Israel Innovation Authority on Monday.

Key Points

1

Global economic crisis impacts Israeli startup investments

2

8,300 hi-tech workers left Israel in 2024

3

R&D positions continue growing despite workforce reduction

4

Wage gap widening in tech sector

According to the 2025 High-Tech Employment Status Report, the number of employees in the Israeli hi-tech sector was 390,847 in 2024, a decrease of 1.2 per cent, or 4,879 employees, compared to the previous year.

According to the report, the decrease was precipitated by the global economic crisis in 2022 that brought about a decline in startup investments, the judicial reform carried out by the Israeli government, and the conflict that broke out on October 7, 2023.

It noted that this is a clear sign of a decline in the growth trend in Israel's hi-tech during the last decade, in contrast to the expanding global activity and demand for research and development (R&D) talent.

The relative share of hi-tech among all employed people in the economy hovers around 11.4 per cent, with no real change in the last three years, following a rapid growth rate between 2012 and 2022.

The report also showed that between October 2023 and July 2024, about 8,300 hi-tech workers left Israel for at least a year, making up 2.1 per cent of the hi-tech workforce, Xinhua news agency reported.

The authors said that policy measures for the return of these employees to Israel should be considered.

The report also said that Israeli hi-tech companies employ about 440,000 people abroad, compared to around 400,000 in Israel.

It added that while the total number of employees is shrinking, there is an increase in R&D positions, reaching over half of the employees in the industry in 2024 and widening the wage gap between hi-tech workers and the rest of Israel's economy.

At the end of 2024, the number of job vacancies in the Israeli hi-tech reached about 17,000, marking a return to growth.

The report highlighted the need to enhance hi-tech skills, including math, computer science, and English, to meet the growing demand in Israel's hi-tech industry.

To combat the brain drain, it stressed stabilizing the business environment amidst security and political uncertainty, adding that updating tax benefits and incentives for returning Israelis is crucial to prevent talent from staying abroad.

Reader Comments

T
Tal K.
This is really concerning. Hi-tech has been Israel's economic engine for years. We need to address the brain drain issue ASAP before it becomes irreversible. The government should focus more on stability and less on controversial reforms.
A
Avi S.
Not surprised at all. Many of my colleagues have moved abroad since October. The combination of security concerns and better opportunities overseas is hard to compete with. 🇮🇱💔
R
Rina L.
The R&D positions increasing is good news at least! Maybe we're shifting to more high-value work? Though the wage gap mentioned is worrying - we need to make sure prosperity is shared.
D
David M.
Respectfully, the article misses how global tech trends are affecting this. Many countries are seeing slowdowns - it's not just Israel. The numbers might bounce back faster than expected!
S
Shira B.
As someone in HR for a tech firm, I can confirm the struggle to find qualified local talent. We're having to look abroad more, which creates its own challenges. The education system needs to step up!
Y
Yoav T.
The 17,000 job vacancies give me hope! Maybe this is just a temporary dip. Israeli tech has shown resilience before - we'll innovate our way out of this too 💪

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Tags:
Israel Hi-Tech Israeli Economy Tech Workforce Innovation Brain Drain Startup Ecosystem
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