Israel's Hi-Tech Workforce Experiences First Decline in a Decade: Report

Synopsis

On April 7, a report by the Israel Innovation Authority revealed a historic decline in the Israeli hi-tech workforce, marking the first such decrease in ten years, with implications stemming from global economic challenges and local conflicts.

Key Takeaways

First decline in hi-tech workforce in a decade.
Workforce fell to 390,847 employees in 2024.
Decrease attributed to global economic crisis and internal conflicts.
R&D positions are increasing despite overall job losses.
Need for policies to retain talent and enhance skills.

Jerusalem, April 7 (NationPress) The Israeli hi-tech sector has experienced its first decrease in workforce in a decade, as reported by the Israel Innovation Authority on Monday.

According to the 2025 High-Tech Employment Status Report, the workforce in Israel's hi-tech industry stood at 390,847 in 2024, reflecting a 1.2 percent drop, equating to 4,879 fewer employees compared to the prior year.

This decline has been attributed to the global economic downturn in 2022, which led to a reduction in startup funding, the judicial reforms initiated by the Israeli government, and the outbreak of conflict on October 7, 2023.

The report indicates a notable shift from the growth trend observed in Israel's hi-tech sector over the past decade, contrasting with the increasing global demand for research and development (R&D) professionals.

Currently, the hi-tech sector represents approximately 11.4 percent of total employment in the economy, showing no significant change over the last three years after rapid growth from 2012 to 2022.

Additionally, the report reveals that between October 2023 and July 2024, around 8,300 hi-tech professionals left Israel for at least a year, constituting 2.1 percent of the hi-tech workforce, as reported by Xinhua news agency.

The authors recommended that policies be established to encourage the return of these employees to Israel.

It was also noted that Israeli hi-tech firms employ approximately 440,000 individuals abroad, as opposed to around 400,000 within Israel.

While the overall number of jobs is declining, there is a notable rise in R&D positions, which now account for over half of the workforce in the sector in 2024, exacerbating the wage disparity between hi-tech employees and the broader economy.

By the end of 2024, job vacancies in the Israeli hi-tech sector reached around 17,000, indicating a rebound in growth.

The report emphasizes the necessity to bolster hi-tech skills, particularly in mathematics, computer science, and English, to satisfy the increasing demands of Israel's hi-tech industry.

To mitigate brain drain, it highlighted the importance of stabilizing the business climate amid security and political uncertainties, along with the need to update tax incentives for returning Israelis to deter talent from remaining abroad.