Survey: Software Sector Layoffs, Hardware Sector Hiring on the Rise

A survey by the Innovation Authority and Tzabiran reveals gaps in the high-tech industry: the layoff rate in hardware companies stood at 1.1% in the first half of 2026, compared to 6.6% in the software sector. About 37% of high-tech companies expect a decrease in hiring in the second half. The survey was conducted among 289 employers and indicates a growing impact of artificial intelligence on future efficiency measures.

A survey by the Innovation Authority and Tzabiran, published this week, reveals that high-tech companies laid off an average of 2.8% of employees in the first half of 2026, but simultaneously hired 8%. The gap is partly due to about 4.3% of employees leaving voluntarily. About 37% of high-tech companies estimate that the volume of hiring in the second half will be lower, compared to 19.3% in other industries. The layoff rate in hardware companies, such as chips and defense industry, stood at only 1.1%, while in the software sector it reached 6.6%. The gap correlates with the impact of artificial intelligence: software companies are affected in competitiveness, while hardware companies benefit from growing demand for chips and computing infrastructure. The survey was conducted among 289 employers, employing about 130,000 workers, and represents about 80% of the industry. It also shows that 17% of companies that conducted broad layoffs cited the strengthening of the shekel as a reason, and 28% cited 'efficiency'. The impact of AI on future layoff plans rose from 29% in December to 50% in June, and 17% reported a significant impact. CBS data shows a 7% increase in high-tech employment in the first quarter to 424,000, with significant turnover in the nature of workers.