Israel defense-tech hiring jumps 20% as AI layoffs spread among high-tech sector

A survey by GotFriends, published in Globes, shows defense-tech startups are hiring at an accelerated pace, with a 20% increase in new jobs and an 8% rise in salaries, while other tech companies reduce staff due to AI adoption. The report indicates a shift in Israel's tech employment map, with growing demand for hardware engineers and competition for engineers against software and fintech sectors.

A new survey by Israeli recruiting firm GotFriends, seen by Globes, reports that while many tech companies are cutting staff and slowing hiring due to AI adoption, defense-tech startups are aggressively expanding. The number of new jobs in defense-tech increased 20% in 2026 compared to the same period last year, and wages are climbing about 8%. The report indicates a shift in Israel's tech employment map, with defense-tech competing for the same engineers as software, fintech, and cybersecurity companies. According to GotFriends, companies hiring the most include Kela Technologies, Xtend, Airis Labs, D-Fend Solutions, and Axon Vision. Defense-tech companies globally have raised about $12.3 billion since the start of 2026, almost twice as much as the same period last year. In Israel, companies raised about $846 million, nearly the amount raised in all of 2025. About 800 Israeli startups are receiving procurement orders directly from the Ministry of Defense, establishing business activity and revenue. The report attributes growth to the change in global security reality, with wars in Ukraine and the Middle East driving demand for quickly developed solutions. The procurement model has shifted, with governments and armies turning to startups. The wars have shortened the path from lab to battlefield, turning Israeli defense innovation into an international showcase in autonomous systems, drones, intelligence, and air defense. Demand is rising for hardware engineers, including FPGA and VLSI engineers, alongside Python, Embedded, C++ developers, cloud and AI experts. The report highlights the return of hardware engineers to center stage. Salaries have increased about 8%, narrowing the gap with SaaS, fintech, and cybersecurity companies. Average salaries: hardware architects NIS 50,000, algorithmic engineers NIS 47,000, AI and VLSI engineers NIS 45,000, experienced software developers NIS 44,000 per month. The report notes a sharp increase in candidates applying to defense-tech companies, driven by sense of meaning and impact on national security.