Is Israel’s High-Tech Bubble Bursting? Over 500 Workers Fired Sunday

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JERUSALEM (VINnews) — Israel’s high-tech industry has been the country’s economic powerhouse in recent years, with huge international companies maintaining local outlets, numerous mega-exits and more start-ups than any other country. However in recent months the sector has seen a slowdown, as investments in new projects have been slashed and many companies downsize to meet the lower growth expectations.

On Sunday more than 500 Israeli tech employees were laid off in one day, with the country’s most successful sector having now lost 3,000 workers in recent months, according to a Kan 11 report.

AID Genomics, a Singaporian medical technology company which provides accurate genetic diagnostics for various cancers, announced a substantial reduction in its activity in Israel by moving its research and development center abroad and canceling planned investments in the country.

This resulted in some 500 workers — the vast majority of the firm’s workforce in Israel — being laid off, according to the reports.

Earlier, US insurance firm Asurion announced that it was closing its Israeli development center, amid restructuring, resulting in 120 employees being fired, the reports said.

In addition, 40 other workers will be laid off at the end of the year.

In 2013, Asurion acquired Israeli startup Soluto — which had previously been owned by Naftali Bennett, who later entered politics and ended up serving as prime minister from June 2021 until last month. Bennett earned about 2 million NIS from the sale of the company.

Soluto workers were stunned by the layoffs since, as one worker told Kan 11,  everything had been going well and the firm was hiring as recently as a week ago.

“It really came as a total shock. It was very surprising. This was simply an American decision, the site was a success. Even the senior management [of Soluto] was surprised,” he said.

It is unclear whether the layoffs are an individual response to lower investments in start-ups or the beginning of a trend which could see a revaluation and restructure of all companies in the burgeoning sector.

 


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