Only 13% of employers in Israel laid off workers due to AI implementation
According to the Israel Innovation Authority and Zviran employer survey, artificial intelligence is at the core of high-tech activity, but its impact on employment is not yet significant.
By: Yaniv Furmansky, TV10
A survey of Israeli employers conducted by the Israel Innovation Authority and Zviran, examined the effects of Artificial Intelligence on the labor market.
The Innovation Authority is an independent and impartial statutory public entity that operates for the benefit of the Israeli innovation ecosystem and Israeli economy as a whole. It is responsible for the country’s innovation policy,
According to the report, in 2025, despite the deep penetration of AI into the high-tech sector, no significant layoffs were recorded, and there was no material impact on the volume of jobs in the industry.
Among companies that conducted broad layoffs, 75% cited efficiency measures (”streamlining”) as a primary reason, and 27% cited their business situation. In contrast, only 13% cited the implementation of AI as one of the reasons, usually as a contributing factor rather than a sole cause.
The survey was conducted in December 2025 and included 263 employers, of which 192 were high-tech companies, representing approximately 80% of employees in the sector. It includes local companies and multinational corporations operating in Israel across a wide range of fields, including software, hardware, cyber, semiconductors, internet, gaming, defense technology, biotech, and life sciences.
The share of high-tech workers (out of the total employed people in the economy) has stood at around 11% for the past four years, without significant growth. The Innovation Authority survey reveals that AI is already at the core of high-tech activity, but—at least so far—its impact on employment figures is insignificant.
Innovation Authority CEO Dror Bin: “The data indicates a significant gap between the public discourse surrounding AI and what is actually happening on the ground. AI is already embedded in the core activity of high-tech companies in Israel and is transforming them, but so far, it is not replacing workers in significant numbers. At least at this stage, it appears that the labor market is undergoing a gradual adjustment, not a shock. The main challenge is not job loss, but rather skills adjustment, employee training, and the proper integration of new technologies.”
In 2025, cautious signs of recovery were recorded in the volume of recruitment, alongside continued efficiency processes. 94% of high-tech companies in the sample reported recruiting new employees over the past year, but the rate of recruited employees out of total employed persons stands at only 7.9%, slightly lower compared to the rest of the economy.
Concurrently, about 23% of companies indicated they estimate the volume of recruitment in 2026 will be lower compared to 2025. The main reasons for this are not technological but stem from efficiency considerations and the business situation, with AI implementation constituting only a secondary factor in most cases.
Regarding layoffs, the data does not point to AI as a significant factor either. 35% of high-tech companies reported laying off employees in the last six months, against the backdrop of downsizing or closing teams and departments. However, when examining the reasons for these layoffs, it becomes clear that artificial intelligence is not the central cause.
15% of employers in the sector plan layoffs in the coming six months, but 71% of them noted that AI has no influence on the decision, while the rest noted only a minor influence. No company indicated that AI implementation constitutes a significant factor in the decision to fire employees.
52% of high-tech companies reported significant implementation of AI tools in technological work processes, meaning deep integration into systems, development, and infrastructure, rather than just spot or personal use.
Additionally, 43% of high-tech companies reported using AI tools in non-technological roles as well, such as marketing, sales, operations, and human resources. However, only 13% of companies noted full cross-organizational implementation with deep integration into organizational systems.
42% of high-tech companies reported employing workers in roles dedicated to the AI field, including AI researchers, GenAI engineers, model developers, implementation experts, and compliance managers.
In non-high-tech sectors, some penetration of AI roles was also recorded, but at a much lower volume. The implication is that, at least for the time being, the demand for manpower is not disappearing but changing, shifting toward new skills and a deeper integration between technology, data, and people.