Israel’s Hi-Tech Bubble Bursting? Over 500 Employees Dismissed In 1 Day

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Illustrative: In this photo taken Tuesday, March 15, 2016, ultra-Orthodox Jewish men work at a high tech start-up in an office in Tel Aviv. (AP Photo/Dan Balilty)

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Over 500 high-tech employees in Israel were laid off on Sunday from two companies, Israeli media outlets reported.

According to a Kan News report, the first company is Asurion, a US tech insurance company, which announced the closure of its development center in Tel Aviv, necessitating the dismissal of 120 employees in addition to 40 workers who will be laid off at the end of the year.

An interesting fact about Asurion is that in 2013, it purchased the Israeli startup Soluto and one of the beneficiaries was Naftali Bennett, who was one of the company’s early investors and briefly served as its CEO in 2009. He received several million dollars in the deal.

The second company is Aid Genomics, a Singaporean medical technology company, which announced that it is moving its R&D center abroad, leading to the layoff of 400 workers.

Israel’s famed high-tech industry may be hitting a bubble. Thousands of high-tech employees have been laid off since March, according to Israeli media reports.

(YWN Israel Desk – Jerusalem)


1 COMMENT

  1. Not unique to EY. Tech gurus are forecast a 7-10 percent contraction in technology employment over the next 18 months. Many of these companies are “recent startups” and will have difficulty attracting new capital through IPOs or SPACs and stock-based compensation is not an option. It will have considerably less effect on low-Tech companies although no one is immune when the overall global economy is contracting. Will be interesting to see how quickly the Bank of Israel raises interest rates in line with the other central banks.