How much has the Israeli high-tech industry shrunk during the period of crisis that has plagued it since last April? A look at the published waves of layoffs reveals only a partial picture that hides underground currents that also exist in high-tech companies that are apparently more successful. Those who preferred to avoid waves of significant layoffs.
● From today to tomorrow: the insurtech company Hippo informed the employees that 10% of them will be fired
● This is how Microsoft turned from a company that was considered a joke in the cyber worlds into a global power
To this end, monitoring employee reports on the LinkedIn social network may provide a more reliable picture. The network is based on voluntary reports from employees who update their employment status, the name of the company they work for, and the nature of the position – in order to create additional contacts in the industry.
LinkedIn is considered particularly popular in the high-tech industry. The status update is done gradually and not always in real time, but more than the absolute numbers – the trend is the one that is important and indicates whether the companies are facing growth or shrinking.
Hippo laid off 70 employees
The summer’s wave of layoffs seemed to be calming down, until on Wednesday, Hifo announced the layoffs of 70 employees. In Israel, the number of monthly layoffs decreased from 1,618 laid off in July to 1,007 people so far in August, and the number of companies whose layoffs reached the media has halved, according to the “Lestartup” website. It is possible that the beginning of a new quarter in October will return the waves of layoffs.
1. The scope of open positions has been significantly reduced
How do companies reduce their workforce even without firing dozens of employees at once? For example, by not filling jobs that were abandoned by employees who left. At the same time, the companies significantly reduce the number of new open positions, and avoid recruiting new employees. From an examination of the LinkedIn accounts of the 77 unicorns and the leading public companies, it appears that the Israeli high-tech industry has reduced the number of their open positions in the last three months to nearly 9%. The monthly growth in the manpower status of the large companies shrank from about 5% in the summer months of 2021 to less than a single percent between July and August of this year.
2. Growth in the cyber sector since January reached 1.4%
The slowdown in the growth of companies did not escape leading industries either. The growth of cyber companies stood at 8% in May last year, and maintained a growth of about 7% until January of this year. However, since then it has dropped to 1.4% as of August.
The cyber companies that reduced the open jobs on LinkedIn include Transmit Security (-56%), Aqua Security (-52%) and Cyberzen (-48%).
3. Flaunt parties on the outside, and cut back on the inside
The table of job cuts in the LinkedIn network presents an interesting picture. In fintech companies, growth dropped from an average monthly level of about 4.5% in the second half of 2021 to close to zero today.
The one leading the list of companies with the most significant rate of decrease in the posting of new jobs is Ituro with 97%. At a considerable distance behind is Bizabo with 80%. Next, are ranked the growing companies Scenic (-70%) and Gong (-69%), both of which did not make extraordinary cuts during the recent period.
The digital payments company Rapid, which boasts of large parties and managing the image of a growing company, has reduced the number of open jobs on LinkedIn by almost half.
4. Employee management technologies were less affected
The companies in the field of human resource management systems – including Deal, Papaya Global and Havov – maintain relatively high growth for the industry, with an average monthly growth of 2.25%. However, on the other hand, the growth in insurtech companies – the trend of digital insurance companies – dropped from a peak of nearly 7% in May 2021 to below one percent in the summer months of this year.
In a comparison between unicorns, high-value private high-tech companies, and public companies – you can see a convergence of similar data. Last year, growth among unicorns was twice that of public companies. Almost a year and a half later, it can be seen that the large public and private companies have converged to similar monthly growth rates of less than one percent.
5. Hiring has also been halted in companies with great growth
Using LinkedIn data, it can be proven that not only the companies that went out in waves of layoffs have shrunk dramatically, but also unicorns and other public companies that have significantly reduced the growth rate of the number of employees – and significantly reduced the number of vacancies.
Comparing the growth in the last eight months compared to the eight months before them, it appears that not only companies that carried out rounds of layoffs, such as Seibrizen, Bizavo, Next Insurance, Trax and Itoro, dramatically reduced their growth rate. Companies with high growth – such as Pagaia, Riskpaid, and the insurtech companies Lemonid and Hipo – showed the greatest slowdown in the growth of the number of employees compared to the corresponding period.
Get was reduced by about a percent in eight months
The workforce of Get, which was forced to cancel the planned IPO, exit the Russian market and raise prices for Israeli drivers, has been reduced by about one percent over the past eight months – even without a well-publicized wave of layoffs. In contrast to them, companies such as Iron Source, Sentinel One, Haybove, Monday, Dryvants, Honeybuck and even Leitrix which recently laid off employees, showed the highest growth patterns since the beginning of the year compared to the eight months before it.