Is the party over for Israel's tech sector?

Publication titleGlobes (Rishon LeZion, Israel)
In the first quarter of 2022, the Central Bureau of Statistics reported that demand for software developers fell 3%, although during the same period there was a 6% rise in demand for sales agents and salespeople for shopping malls, and a 5% rise for waiters and bartenders

But there was a sharp decline in demand for electronics engineers, down from peak demand for the profession in April 2021. According to the Central Bureau of Statistics, demand for electronics engineers has fallen 31% since October 2021 and by 3.6% since January 2022. But not all engineers are seeing falling demand in job vacancies. The number of job vacancies for mechanical engineers rose 9% in the first quarter of 2022, while there are job vacancies for 1,300 technical engineers, an all-time high for recent years.

A change of direction or temporary decline?

The rise in demand for programmers over the past year was the highest and fastest ever. The number of job vacancies doubled from 7,000 to 14,000, between January 2021 and January 2022. Before Covid it took four years for the number of job vacancies for programmers to double. Will the number of vacancies continue falling, or is it just a temporary decline that will soon halt?

Tech recruitment company Ethosia CEO Eyal Solomon told "Globes" that tech companies are undergoing cautious changes. "A large number of companies are planning to shut down and some are freezing recruitment.

"Although the fall in demand is ostensibly due to the holidays, in our talks with companies that are hiring, major concerns were raised about what is on the way, following the declines on stock markets worldwide, the war in Europe and rising inflation in the US. Some of the companies decided to freeze hiring and sit on the fence to see where the markets are going.

"The level of anxiety created by financial results, combined with global instability, is causing difficulties for new startups in raising capital and many tech companies are making cautious changes in their rate of new hiring."

Sectors that were neglected are now undergoing a correction

Israel High-Tech Association chairman Marian Cohen describes the latest Central Bureau of Statistics data as a 'correction.' He said, "Since it was more attractive to train software engineers, other sectors have suffered from neglect for 20 years including mechanical engineers and for sure areas like engineering and technicians.

"Until today the biggest shortage of tech people is not in startups but manufacturing...

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