Israeli unemployment rates rising in hi-tech with the advancement of artificial intelligence

Unemployment in Israel's hi-tech sector is reaching concerning new highs, with over 16,000 workers recently registering as unemployed. This figure represents a threefold increase compared to 2022, according to Inbal Mashash, director general of the Israel Employment Service.

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We are seeing a trend of an increase in the number of job seekers in hi-tech. This is a record number for normal times. If we look at trends in recent years, compared with 2022, this is a threefold increase. That is definitely concerning and indicates a problem.

Mashash highlighted that the impact is most severe among software developers, who possess significant experience. She noted a strong connection between the rise in job seekers and the expanding use of artificial intelligence, suggesting that AI adoption is a primary driver of these layoffs. "These are people from the core of the industry, with more than eight years of seniority and experience," she stated.

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Half of them are software workers, where there is very high exposure to artificial intelligence. That is why we are seeing a very strong correlation and connection between the fact that the number of job seekers has risen and the expansion of the use of artificial intelligence.

In response, the Employment Service is focusing on upskilling programs for these experienced workers, recognizing the rapid pace of change in the labor market. While acknowledging the sector's importance as an economic engine, Mashash pointed to approximately 14,000 open positions within hi-tech and an additional 4,000 technology-related jobs elsewhere. The organization aims to retrain and reintegrate displaced workers, potentially into non-technological sectors like traditional industries, in cooperation with the Innovation Authority and other bodies.

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In the era of artificial intelligence, everyone must undergo upskilling, and this is not only about the hi-tech sector. Our role is to look at the labor market as a whole, which is changing at a very fast pace.

Mashash anticipates that the negative trend will continue in the coming months before gradually moderating. The situation underscores the challenges faced by skilled professionals in adapting to the swift advancements and integration of AI in the workplace.

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The hi-tech sector is the engine of growth for the economy. We see that there are about 14,000 open positions in the sector, and another 4,000 technology jobs outside it. We assume that some of the people who undergo certain training programs will find themselves back in the sector.