High-Tech Job Market Faces Unprecedented Unemployment Surge: What You Need to Know

High-Tech Job Seekers Surge by 12% Amidst Industry Growth Stagnation

A significant increase in the number of unemployed high-tech professionals has been recorded in Israel recently. The count of job seekers in software development and application analysis has risen by 12% in the last two months, escalating from 6,250 in December to 7,000 in February. Similarly, the number of job seekers in database and network-related roles has risen by 9%, from 1,070 to 1,170. Notably, the share of high-tech job seekers among all job seekers surged from 7.5% in early 2024 to 11.3% in February 2025, as detailed in the Labor Market Pulse report for February 2025 published by the Employment Service, which describes the unemployment situation in high-tech as "worrying."

The rise in high-tech unemployment is particularly striking, coinciding with a 2.2% decrease in the overall number of job seekers, bringing the total to 160,000—the lowest figure since the war began. Over the past two months, increases have been observed across various high-tech sectors: engineers (up 4.9%), engineers and technicians in physical sciences and engineering (up 3.3%), and operations and IT engineers (up 0.8%).

According to the Employment Service, this trend is not a seasonal fluctuation but a continuation of a long-term pattern. The proportion of high-tech professionals among all job seekers has been increasing steadily over the last six years, from 6.3% in January 2019 to 11.3% in February 2025, nearly doubling. Since the third quarter of 2024, this trend has accelerated, indicating that job stability in high-tech is weakening. While the market favored job seekers in 2022, that is no longer the case.

One contributing factor to the rise in high-tech unemployment is the sector's overall expansion within the labor market. A larger industry creates more non-essential positions, but this accounts for less than a third of the phenomenon. According to the Central Bureau of Statistics, high-tech jobs constituted 8.6% of the labor market in January 2019, which has now increased 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. Consequently, junior workers are expected to face greater challenges entering the industry.

Dadi Perlmutter, chairman of the committee to expand human capital in high-tech, bluntly states, "The high-tech sector's growth rate has slowed over the past two years, and indeed, the industry’s growth trajectory has flattened." The number of salaried jobs in high-tech has seen minimal growth: 390,000 in 2022, 397,000 in 2023, and 400,000 in 2024.

Perlmutter explains that demand for high-tech workers has slowed due to the war, advancements in artificial intelligence, and global economic conditions. He notes that investment in high-tech worldwide has significantly dropped over the past two years, with Israel not being an exception. However, he predicts that in the medium term, as companies adapt to artificial intelligence, it will create new jobs.

The Employment Service emphasizes that the increase in high-tech job seekers is part of a broader trend of weakening in traditionally strong professions. In the last two months, 11 out of 17 professional fields that saw a rise in job seekers were considered strong sectors, including high-tech, engineering, and medicine. The number of doctors seeking work has increased by 10%, 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 has risen by 3.5 percentage points over the past two years. In February, unemployment rose in wealthier cities, while most other cities experienced declines. The largest decreases in job seekers were recorded in northern cities, while increases were noted in affluent areas like Hod Hasharon, Kfar Saba, Tel Aviv, and Ramat Hasharon.