More high-tech workers are unemployed as industry growth stalls
The number of job seekers in high-tech has jumped by 12%, with engineers and IT professionals hit hardest.
A significant increase in the number of unemployed high-tech professionals has been recorded in Israel in recent months. The number of job seekers in software development and application analysis has risen by 12% over the past two months—from 6,250 in December to 7,000 in February. Similarly, the number of job seekers in database and network-related roles has increased by 9% during the same period, from 1,070 to 1,170. The share of high-tech job seekers among all job seekers has jumped from 7.5% in early 2024 to 11.3% in February 2025. This data comes from the Labor Market Pulse report for February 2025, published on Sunday by the Employment Service, which describes the unemployment situation in high-tech as "worrying."
The rise in high-tech unemployment is particularly notable given that it coincides with a 2.2% decrease in the overall number of job seekers in February, bringing the total to 160,000—the lowest figure since the war began. In fact, over the past two months, increases have been recorded across all high-tech sectors: engineers (excluding electrical and electronics engineering, up 4.9%), engineers and technicians in the physical sciences and engineering (up 3.3%), and operations and IT engineers (up 0.8%).
According to the Employment Service, this is not a seasonal fluctuation but the continuation of a long-term trend. The proportion of high-tech professionals among all job seekers has been rising steadily over the past six years, increasing from 6.3% in January 2019 to 11.3% in February 2025—almost doubling. Since the third quarter of 2024, this trend has accelerated significantly, indicating that job stability in high-tech is weakening. Whereas in 2022, the market strongly favored job seekers, this is no longer the case.
One factor contributing to the rise in high-tech unemployment is the sector’s overall expansion within the labor market. A larger industry naturally produces a greater number of non-essential positions. However, this accounts for less than a third of the phenomenon. According to the Central Bureau of Statistics, high-tech jobs made up 8.6% of the labor market in January 2019, a figure that has now grown to approximately 10%. This 1.4 percentage point increase in high-tech employment stands in stark contrast to the five percentage point increase in high-tech job seekers over the same period. One consequence of this trend is that junior (inexperienced) workers are expected to face greater challenges entering the industry.
Dadi Perlmutter, chairman of the committee to expand human capital in high-tech—appointed in 2022 by then-Minister of Innovation Orit Farkash HaCohen—describes the situation bluntly: "The high-tech sector's growth rate has slowed over the past two years, and in fact, the industry’s growth trajectory has flattened." The number of salaried jobs in high-tech stood at 390,000 in 2022, 397,000 in 2023, and 400,000 in 2024. In other words, there has been no real job growth, and relative to natural labor market expansion, the sector is effectively in decline.
"Demand for high-tech workers has slowed due to the war, artificial intelligence, and global economic conditions," Perlmutter explains. "The amount of investment in high-tech worldwide has dropped significantly over the past two years, and Israel is no exception."
However, he predicts that in the medium term, once companies adapt to artificial intelligence, it will actually create new jobs. It is also worth noting that even before the war, investors were distancing themselves from Israel due to concerns over judicial reform and uncertainty about the country’s democratic future.
More unemployed professionals in traditionally strong industries
The Employment Service highlights that the increase in high-tech job seekers is part of a broader trend: the weakening of traditionally strong professions. In the past two months, 11 of the 17 professional fields that saw a rise in job seekers were considered "strong" sectors, including high-tech, engineering, medicine, and management. The number of doctors seeking work has risen by 10% in the last two months, while the number of unemployed senior managers has grown by 4.3%.
As a result, the share of job seekers from high socio-economic localities (clusters 8–10) has increased by 3.5 percentage points over the past two years, from 16.3% to 19.8%. Another indicator of this trend is that, in February, unemployment rose in wealthier cities, while most other cities experienced declines. The largest decreases in job seekers were recorded in northern cities such as Rosh Pina (-14%), Acre (-6.5%), and Nahariya (-6.3%). However, all the cities where job seeker numbers increased were affluent areas: Hod Hasharon (+3.8%), Kfar Saba (+2.2%), Tel Aviv (+2%), and Ramat Hasharon (+1.7%).
