The year 2024 has just begun - and it already seems that the high-tech sector, along with the rest of the economy, is moving in a very negative direction.
Just since the beginning of this month, more than 1,000 workers have been laid off in Israel at various high-tech companies, 990 of them from Solaredge, the well-known solar energy solutions provider, whose stock has fallen by 67% since the beginning of 2023.
At the same time, the cyber company Orca Security embarked on a general layoff process, and as of this writing, fired 60 employees, 15% of its workforce in Israel.
Other companies such as Trigo, the digital bank One Zero, the gaming company Unity, the unicorn Science and even the computing company HP - all laid off dozens of their employees in Israel since the beginning of January.
Nvidia building and the industrial and high-tech park in Kneam Photo: Shutterstock, Photo: Shutterstock
As mentioned, the year 2024 began with layoffs and streamlining processes in the economy in the fields of industry and high-tech.
According to sources in the industry, this is a wave that is expected to continue and even worsen, against the background of the negative start of the year.
For example, the Strauss Group recently announced continued streamlining, which includes layoffs of approximately 150 employees out of approximately 6,000 employees in the group.
The company's board of directors approved an organizational streamlining process.
The goal of the program is efficiency and savings, while adapting the organizational structure of the activity in Israel to the group's strategy and the macroeconomic environment.
Strauss, photo: Enchio Gush-Gini
The group said at the time that most of the efficiency would come from the reduction in the administrative layers, and would not include employees who were evacuated from their homes or those currently serving in the reserves.
The company estimates that the implementation of the program is expected to result in annual savings estimated at NIS 45-55 million.
At the same time, the company announced a 25% price increase for Strauss products at an average rate of 1.7%.
The president and CEO of the Strauss Group, Shai Babad, said in his announcement at the time: "The focus and streamlining moves in the company will allow us to continue investing in infrastructure and future growth. In 2023, we invested hundreds of millions of shekels in all factories and in our supply chain all over the country, and we will continue to do so this year as well. Out of an obligation to create food security in general, and in wartime in particular."
The food company that made headlines recently is Vita Fruit of the Galilee, which announced the cessation of frozen vegetable production.
As a result, last August 25 employees were fired.
The company is expected to lay off 53 additional workers out of the 120 remaining factory workers.
The factory, which belongs to the Half Free chain, stopped the production of frozen vegetables after suffering losses due to cheap imports in the industry, but will continue the production of frozen chips.
Because of this, not only his workers will be harmed, but also the northern farmers, from where the vegetables came to the production line.
Streamlining moves
The other day this issue came to the finance committee chaired by Moshe Gafni, which held a discussion on the danger of the closure of the Vita Peri HaGalil plant.
During the discussion, the members of the committee called on the Ministry of Finance to cancel the tariff reductions on industrialized agricultural products.
According to Yoel Amir, CEO of Coface BDi, "Against the background of the negative start of 2024, which includes another round of layoffs mainly in the high-tech industry, it seems that companies in Israel internalize the business reality, and seek to respond quickly and adjust their activities to market conditions, in order to survive and bring about an improvement in business results quickly.
Finance Committee.
Deals in the 90th minute, photo: Oren Ben Hakon
"Accordingly, we are witnessing many companies that recently carry out efficiency measures, which include reducing the number of employees, as part of their desire to bring about savings in their expenses. The conditions of uncertainty that characterize the last period are stopping development moves and innovative initiatives, and there is now a decrease in investments and great difficulty in raising funds.
"The Israeli economy is facing one of the most challenging times it has ever known, and is dealing with the continuation of the fighting, the lack of workers, the high interest rate environment that makes it difficult to flow activity, the drop in demand and the ongoing political instability, alongside exogenous variables that do not depend on the Israeli economy, such as global energy prices, the tensions and the economic consequences Between the US-Russia-China triangle, the war in Ukraine, the natural disasters that cause, among other things, damage to crops, and more.
"In the coming months, the wave of layoffs is expected to continue and even worsen, and the picture of the day after in the Israeli labor market depends to a large extent on the date of the end of the fighting, on the nature of government support for the affected companies and businesses, and on the wise business management of the company managers."
A slowdown in many industries
Dr. Ron Tomer, president of the Federation of Industrialists, told Israel Hayom: "We are very afraid, because we are only seeing the beginning of the wave of layoffs.
We see a slowdown in the economy also as a result of the recession in the world and in Israel, against the backdrop of past interest rate increases, inflation and the war, which of course creates all kinds of other challenges.
Also, there is the effect of the government's conduct, which puts on the table a budget that does not encourage growth, and which conveys to the business people that those who want to grow and grow should better look for their place in other countries, which want to grow and invest in business people and their ventures.
Info, photo: none
"I think the issue of layoffs will increase, because there are other industries that are slowing down - like the construction industries, for example. The contractors build 50% of the construction starts due to a manpower crisis and other problems, an issue that the state does not handle properly. As soon as they build less, they need less construction materials I predict that if there is no change, there will be layoffs of hundreds and thousands of workers in the construction industry.
"On the subject of food, Israel long ago became a country that eats its producers. It created all the impossible conditions for producers to operate in the country. It blamed them for the cost of living, even though the consumer goods index rose significantly less than inflation. The state opened imports from countries where the conditions are not equal, which is not There is regulation and that the wage there is a shameful starvation wage, which we would not want to pay the workers.
"Why are factories looking for their future abroad?
In the state budget, the Ministry of Finance fought and significantly cut the encouragement of new factories in industrial zones.
This is opposite to the trend in the world.
In Europe and the US they realized that they needed to bring the industry to them. The US is friendly to factories that want to move there, and it gives countless benefits.
The same is true in Greece and Portugal, for example.
In such a situation, with all the heartache, industrialists are forced to go to places that want them.
Any line that does not open here and moves to other places is a loss of more jobs.
Ron Tomer, chairman of the Federation of Manufacturers, photo: Oren Ben Hakon
"After the unemployment rate increases dramatically, it will also increase the rate of recession in the economy. This is a snowball of the economic collapse, while the government is required to spend more and more. It has been a long time since the State of Israel was under such a great threat, and the workers in Israel have not been exposed to the risk of poverty for a long time as the current policy might expose them to her."
were we wrong
We will fix it!
If you found an error in the article, we would appreciate it if you shared it with us