The number of unemployed Israeli tech workers has reached a historic peak, hitting roughly 16.3 thousand people as of last May, up from about 7.7 thousand in 2019. This comes from the tech report issued by the Employment Service yesterday.

Most of these unemployed tech workers (around 60 percent) are relatively new to the field, with up to four years of experience, while about half of them (31 percent overall) have two years or less (juniors).

Challenges for juniors entering tech have been discussed for years, yet the report indicates their share among job seekers has actually fallen since 2023, when they made up about 74 percent and 49 percent respectively by seniority level.

A notable finding concerns more experienced workers, who remain in demand especially in deep tech areas. Unemployment in this group has more than doubled: since 2023, those with five to eight years of experience saw a 138 percent rise, while those with over eight years experienced a 181 percent jump.

This unemployment wave has pushed the tech sector's share of all job seekers to about 11 percent, compared to 5.78 percent in 2019. The Employment Service also notes the sector's overall growth to roughly 404 thousand workers, versus 213 thousand in 2012 and 396 thousand in 2023.

The Employment Service mainly credits the rise in tech unemployment to AI development, stating that although the increase began before ChatGPT, a strong correlation exists between wider AI use and the ongoing growth in tech job seekers.

Data show that from early 2022 until ChatGPT launched in November 2022, tech job seekers represented only about 4 percent of all registered seekers; since then their share has nearly tripled to around 9 percent and now stands at 11 percent.

Tech firms are using the AI trend to trim staff through layoffs, yet some view tying the surge directly to ChatGPT or AI rollout as an oversimplification, since correlation does not prove causation.

Dr. Tal Aspir, partner and head of the AI lab at BDO consulting, noted that each tech sector must be assessed separately, as downsizings often stem from rising interest rates affecting funding, dollar weakening against the shekel, and other recent company challenges.

Fields like defense tech and cyber show the opposite pattern with strong hiring demand, indicating a shift of talent between areas rather than a broad decline.

Aspir added that spotlighting AI is convenient, but only about 20 percent of organizations actively implement it in production, with most still learning its use and viewing it as a support tool rather than a replacement.

Companies accumulated excess staff during a workers' market to signal growth for funding or IPOs, and now must reduce numbers due to economic pressures; blaming AI provides an easy, trend-aligned explanation that workers rarely challenge.

However, this narrative risks discouraging students, as computer science enrollments are dropping sharply amid fears of no future developer jobs, even though roles are evolving rather than disappearing.

Academia is adapting by teaching AI-assisted development, while large firms continue building products and adding productivity features. AI serves as an empowerment tool that moves programmers toward higher-value oversight and control tasks, driving demand for those skilled in working alongside it.