Israeli Tech Expands Abroad as Local Employment Growth Slows
A new study reveals that Israeli high-tech is increasingly expanding operations abroad while local employment growth slows down, influenced by global scaling and artificial intelligence integration.
Israeli high-tech continues to demonstrate global strength: this past March, Google finalized its acquisition of Israeli cloud security firm Wiz, founded by Assaf Rappaport, in a deal announced at $32 billion to strengthen its cloud security services.
Global Expansion vs. Local Slowdown
Yet, while Israeli technology companies achieve international success, new research reveals a concerning trend: an increasing share of their activity is expanding outside Israel, while the local employment growth rate slows down.
A new study by the Phoenix Holdings capital market research institute at Reichman University reveals that in 2025, approximately 400,000 workers were employed in Israeli high-tech, about 18,000 fewer than projected if pre-COVID growth trends had continued. This reflects potential jobs not added to the sector rather than actual layoffs.
Migration to the US and AI Impact
Data from the Israel Innovation Authority shows that in 2019, about 69% of employees at private Israeli tech companies were based in Israel, but by March 2026, this figure dropped to just 62%. Meanwhile, the USA has emerged as a primary destination. According to Guy Franklin, founder of the Israeli Mapped in NY initiative, about 470 Israeli startups were operating in New York by last May.
Simultaneously, the artificial intelligence revolution is reshaping workforce numbers. Last May, Wix announced the layoff of about 1,000 employees, roughly 20% of its workforce, with CEO Avishai Abrahami citing AI advancements and the strengthening shekel as key factors. Furthermore, average funding per deal reached approximately $39.3 million in the first half of 2026, though only 35.5% of venture capital deals were initial investments.
