Since its launch in 2025, it has wiped out Israel’s high-tech sector and has impacted robust and profitable companies in the industry. In contrast to last year’s “emergency layoffs,” sources say the latest layoffs are planned and calculated moves when the war forced businesses to cut their labor. Large companies have chosen to scale down and streamline their strength status despite their high financial resources, despite peak revenues, making the future more promising than ever before. I can see it.
Every year, after the annual report is released, businesses begin to develop strategic plans for next year. They’ll either embark on a very big recruitment drive or fire people to fit this year’s business goals.”
Up to 13% of the company’s workforce
One of the most well-known companies to announce layoffs is Adtech Company Appsflyer, which has developed a platform for digital campaign performance measurement and monitoring. The company, which employs around 1,400 people and is headquartered in Herzliya Pituah, has announced layoffs of around 100 employees, about 7% of its employees. “The 100 employees at a company like Appsflyer are rare people. I don’t remember layoffs on this scale,” Wax said. “In large companies, this isn’t a very surprising move. Changing or moving forward with “complete steam” is something that’s commonplace for them. ”
Appsflyer’s movement comes exactly when the company is undergoing business success. Appsflyer has been profitable in 2024, achieving its revenue targets with positive cash flow for over two years. According to reports, AppSflyer generates annual revenues from $300 million to $350 million, and is in the process of investigating the potential IPOs at NASDAQ, with plans to raise around $300 million.
At the same time, one of Israel’s most profitable gaming companies is embarking on layoffs of dozens of employees, with industry estimates ranging from 50 to 100. Game Coin Master generates an estimated $2 billion in annual revenue. Unlike other companies, MoonActive did not make any significant layoffs during the war. The current movement appears to be intended to flush “dead trees” accumulated in businesses.
Another company that announced this week’s layoffs is automotive company Innoviz, which has rejected 9% of its employees. The company, which develops laser sensors for the vehicle, explains the move is intended to reduce unnecessary development efforts and reduce annual costs by around $12 million. This was the second round of layoffs at Innoviz within a year, with 13% of employees being laid out in the previous round.
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Nevertheless, the industry’s rating is that the current wave actually includes healthy market behavior. Wax said, “We don’t see it as something as important as a year ago shortly after the outbreak of war. This is a healthy step that the market can handle. Looking at the market, it’s approaching. Explosions In this sense, we have already seen this in our financial results for January.
Layoffs are not unique to Israeli tech companies, but are downsized by many international companies, including tech giants. Meta recently announced that it would be firing 5% or 3,600 employees of its workforce. Google is recruiting volunteers for early retirement, and Salesforce has announced plans to let go of 10% of its employees. According to LayOffs.fyi, 31 companies around the world have been monitoring the global technology industry since laying off more than 7,000 employees.
It’s different from the 2024 waves
The current wave of layoffs reflects a similar trend seen just a year ago. In early 2024, Israel’s tech industry was subject to a dramatic change when around 3,000 employees were fired from 17 companies in the first 10 days of the year. Among the most notable companies that were laid off at the time was Unity, which bought Israeli iron and fired 25% of its workforce. ORCA Security has lifted 15% of its employees. Trigo, which also develops technology to manage autonomous supermarkets, has lifted 15% of its workforce.
However, unlike today’s situation, layoffs at the time were funded for wars where many companies were forced to cut their labor force due to complex economic conditions and were forced to become more efficient soon. was primarily affected by the effects of uncertainty regarding the ability to procure. . However, while the 2024 layoff wave was largely due to the effects of war and economic crisis, the current wave reflects more planned streamlining processes and strategic adjustments by companies.
“We’re looking forward to seeing you in the future,” said Eyal Solomon, CEO of Tech Placement Company. – Companies of the size that still rely on investments from venture capital funds are currently facing difficulties in raising capital, and are forced to reduce their cash burn rates by reducing their labor force. It’s there. ”
Solomon said another factor was Israel’s cost of employment, which many managers perceived as higher than other countries, “They were in other places like India and Eastern Europe at the beginning of the year. He chose to move the recruitment to. It was also impossible to ignore the Israeli CEO’s anxiety index, and many of them acted together following the war situation.”
Published by Globes, Israel Business News -en.globes.co.il- February 6, 2025.
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