Israel's tech sector is going through difficult days. Wix, Meta, Oracle, Cisco - every week brings more posts about layoffs, and most of them aren't junior employees but senior engineers, product managers, and operations staff for whom the market has shifted beneath their feet. As the CEO of a SaaS company with more than 200 employees, I currently see two types of layoffs in the tech sector, and only one of them is genuinely connected to artificial intelligence.
The first type is the most common, and it is essentially downsizing. Many companies whose products are not at all in danger from AI are laying off employees anyway, claiming to be streamlining with artificial intelligence, because that's simply the easiest way to explain it to the board this year. This is optimization that rides a trend. Every company has fat, and the current climate has legitimized cutting it. But note that the math of "we replaced a person with a cheap machine" still doesn't really work out. The capabilities of AI tools are crazy, but in most cases, adopting them opens up opportunities for growth, not a reason for cuts. That doesn't mean there aren't real cases. There are employees who haven't adapted to the new world, and as in any era, the responsibility to change and learn lies first and foremost with the employee, and it's certainly possible.
The second type are companies for which AI is breaking the product itself. Here, it's not an excuse, it's existential. Take Wix, for example, which is laying off about 1,000 employees. The company's CEO Avishai Abrahami posted: "As the majority of our teams are Israel-based, a very meaningful portion of our costs are shekel-denominated, while our revenue is largely dollar-denominated. This creates structural pressure on our ability to operate at our current scale." The real problem is that today everyone can build a website or app in minutes, simply with a voice message on the way to the office. More and more giants are entering the field with crazy free tools. Today, it is easier to build a basic website with Claude than with Wix. The company tried to release products and adapt itself to the new world but was unable to change the original product enough. This, along with the acquisition of Base44, which does not justify the investment, with an unreasonable cost for the customer.
Here lies the real lesson for the tech job market, both for companies and for people. For employees, job security lies in the ability to move quickly, learn, and adapt to a changing market, even at the cost of giving up the role they've been doing for years and adopting a new title.
For new startups, I would focus on niche startups, which know how to solve the problem in a specific niche in the most precise way possible, where the tech giants won't bother entering that niche deeply and precisely enough. The companies that will survive the next decade are the ones that will be closest to the specific pain of one customer. A cross-functional product that does "everything" is exactly what one of the giants will decide to enter, and it will be difficult for new startups to compete with that.
For companies, I would focus on helping employees adapt to the world of AI, giving them the opportunity, the right training, and the right support to navigate the process. The change is a fundamental change in the approach of employers, but also in the way employees work. My recommendation to employees and enterprises is to look at tasks first from the perspective of "how to do it with AI, even if it currently takes me longer, to make future tasks easier for me, and to learn faster."
And for those who have lost their job over the past month: it says nothing about you, and certainly not about your performance. The market has changed - and this could actually be an amazing opportunity for you. Take advantage of it, invest effort in understanding how to adapt to the new market, and I am certain that the opportunities will come, and will be even more significant than before. Every end is a new beginning, sometimes of something bigger. The real question is not whether AI will take your job, but whether your product and skills can move fast enough that they cannot be replaced by a prompt.
The author is the CEO of SaaS company autoDS
Published by Globes, Israel business news - en.globes.co.il - on June 1, 2026.
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