Israeli Tech Sector Faces Wave of Strategic Layoffs in 2025

The Israeli tech sector, which has long been a pillar of innovation and economic strength, is now facing a wave of layoffs that is shaking even its most successful companies. Unlike the emergency layoffs of 2024 driven by the challenges of war, the current wave seems more strategic, with companies downsizing from a position of strength. Despite being financially strong and with revenue peaks, many companies are opting for a calculated workforce reduction to align with business goals for the coming year.

Leading companies like AppsFlyer, Moon Active, and Innoviz have all recently announced layoffs. AppsFlyer, a successful adtech company with a global presence, has laid off 7% of its workforce, approximately 100 employees, even as the company is on track for a potential IPO. Similarly, Moon Active, a gaming giant behind the hit game CoinMaster, has downsized by 50 to 100 employees. Innoviz, a key player in the auto-tech space, is also letting go of 9% of its workforce to streamline operations and reduce costs.

While layoffs often carry a negative connotation, experts suggest that the current trend in Israel's tech industry is a sign of strategic refinement rather than crisis management. Shiri Wax, CEO of the tech placement firm GotFriends, explains that layoffs are a routine part of post-annual planning in many large companies. She believes the industry is gearing up for a positive market shift, supported by favorable financial results from January and predictions that the U.S. economy under a potential Trump administration will benefit global markets, including Israel.

Moreover, layoffs are not unique to Israel. Major global tech companies such as Meta, Google, and Salesforce have all made similar cuts in 2025, following broader trends within the industry. According to layoffs.fyi, more than 7,000 tech jobs have been cut worldwide this year alone, showing that this is a global phenomenon.

Despite the layoffs, Israel's tech sector is still poised for growth. Companies are adapting to new global economic realities by shifting their recruitment strategies, looking to hire in lower-cost markets such as India and Eastern Europe. These adjustments are seen as necessary to remain competitive and to ensure continued innovation and growth within Israel's tech industry.