The rise of artificial intelligence (AI) is transforming Israel’s job landscape, particularly impacting the high-tech industry. A recent report by the Employment Service, released on Sunday, highlights a troubling trend: the number of unemployed tech professionals has more than doubled in the past three years.
As of December 2025, 16,300 tech workers were recorded as job seekers, a significant increase from just 7,200 in January 2022. This spike is primarily linked to AI technologies that automate coding and other repetitive tasks, which has led to a diminished demand for software developers and systems analysts.
The software sector has faced the most severe impact. While overall unemployment in Israel has decreased by 10% since 2022, the unemployment rate in high-tech has surged by 126%. Out of the 16,300 unemployed tech professionals, 59% are in software roles—approximately 9,600 individuals—with more than half serving as developers or analysts.
Since December 2022, unemployment in software roles has risen by 1.75 times, whereas the increase among mechanical engineers and technicians was only 1.05 times. The Employment Service has cautioned that these trends may accelerate as AI tools become further integrated into development and maintenance, leading some professionals to consider alternative career paths.
Despite this significant rise in unemployment, the overall high-tech market is still on an upward trajectory. Job openings grew by 15% in 2025, increasing from 15,900 to 18,300 positions, resulting in roughly 112 job openings for every 100 job seekers. However, this growth has largely overlooked the software sector, where vacancies have only increased by 5% in the last quarter.
High-tech continues to be a vital component of the Israeli economy, employing 435,000 individuals, contributing nearly 20% of the GDP, and accounting for over half of the nation’s exports. The average salaries in this sector are notably high, with tech professionals earning 32,500 shekels per month as of late 2025—more than double the 13,600-shekel average in other industries. Even those unemployed in tech roles maintain a comparatively strong earning potential, averaging 21,700 shekels.
The situation is also affecting more established professionals. The percentage of job seekers aged 35 to 50 rose from 40.5% to 44.5% between December 2023 and December 2025, indicating that mid-career workers are increasingly at risk in a job market heavily influenced by AI.
