The industry, which contributes 20% of Israel’s GDP and accounts for more than half of the country’s exports, employed approximately 391,000 people in 2024—a decrease of 5,000 employees compared to the previous year.
The report highlighted a dramatic shift from the sector’s previous trajectory. Between 2017 and 2022, Israeli high-tech experienced rapid growth, with the ratio of high-tech workers among all employees climbing from 7.9% in 2012 to 11.5% by 2021. However, this percentage has remained stagnant for the past three years, marking the end of an era of exceptional expansion.
“The most prominent conclusion is that since 2022, there has been stagnation in high-tech employment,” the report stated. The slowdown was attributed to several converging factors: the global economic crisis of 2022 that reduced startup investments, the judicial reform debate, and the war that erupted on October 7, 2023.
The global economic crisis of 2022 primarily impacted the Israeli high-tech by causing a sharp decline in startup investments and venture capital funding, which directly reduced companies’ ability to hire and expand their workforce. The judicial reform controversy, which began in January 2023, created domestic political uncertainty that shook investor confidence, further dampening the flow of investment capital. Two years of war accelerated the sector’s brain drain as approximately 8,300 high-tech workers relocated abroad between October 2023 and July 2024.