High-Tech Layoff Wave Reshapes Israeli National Psychology
Mass layoffs in Israel's high-tech sector, driven by AI integration and economic instability, are shattering the 'psychological contract' between employees and the industry, leading to a deep identity crisis.
Throughout its existence, the high-tech sector has been characterized primarily by a "psychological contract" between the employee and the organization. "I am talented, I am skilled, I am protected," said Ziv Alron, co-founder and social psychologist at IM.Tec. However, today it seems that people in high-tech, who were previously in the strongest position, are now among those facing the greatest uncertainty.
Last week, the Israeli workplace management software giant, Monday.com, announced its intention to lay off 20% of its workforce (620 employees worldwide), citing reorganization as part of its transition from a work management platform to a platform designed for AI agents and human collaboration. This revelation comes on the heels of a relentless wave of layoffs, driven largely by the AI revolution, in which some of Israel's most prominent high-tech companies have cut their staff. Thus, in 2026 alone: Artlist by 40% (200 employees), Wix by 20% (1,000 employees), and Playtika by 15% (500 employees).
Against this backdrop, Monday.com's decision is seen as a watershed moment for the "Start-Up Nation" and a turning point in national psychology. "Unlike other people working in high-tech and startups around the world, Israel has an additional layer of uncertainty," says Noa Metz, a startup psychologist and former venture capital partner, referring to the cumulative result of the ongoing war and geopolitical instability. "Recently, another layer of uncertainty has been added, and that is job insecurity. We no longer feel protected, that this Israeli high-tech industry can keep us safe."
