In the aftermath of the brutal October 7, 2023, onslaught and in the following nine months of Israel’s war with the Hamas terror group, 8,300 tech employees left the country and relocated for a year or more, according to a report released Monday by the Israel Innovation Authority.

Meanwhile, the number of workers in the local tech workforce, also known as the high-tech industry, declined last year for the first time in at least a decade, as uncertainty over the end of prolonged fighting continued to take a toll on the economy.

From the beginning of the war, and until July 2024, the number of high-tech employees who departed Israel for long-term relocation increased and stood at about 8,300 people, or about 2.1 percent of the local high-tech workforce, underscoring deeper concerns about one of the country’s most important sources of tax income, the Israel Innovation Authority cautioned in its 2025 High-Tech Employment report.

“At a period where we’re facing security, political, and economic challenges, the data points to challenges that require immediate attention: stagnation in employment, a change in the mix of positions, and an increase in the volume of relocation,” said Israel Innovation Authority CEO Dror Bin. “To ensure the future of Israeli high-tech, a combined effort of the government and industry is required – investment in human capital, improving skills, returning employees who left Israel, and expanding business activities here in Israel.”

The high-tech sector’s main contribution to the Israeli economy stems in large part from taxes paid by the workers in the sector, and hence trends in high-tech employment will affect state revenues and the entire Israeli economy, the Israel Innovation Authority warned.

The tech sector accounts for about a fifth of Israel’s gross domestic product (GDP), more than half of exports, and about a quarter of total state revenues generated from salaried employee income taxes and company taxation. High-tech employees account for about 11.4% of the Israeli workforce, according to the report.

Over the past 18 months, Israeli startups have been grappling with the ongoing callup of employees to perform........

© The Times of Israel