It was clear to everyone that this time would come, but 2022 was a shock to the high-tech industry. After many successful years of spending money without limits on hiring employees, finding real estate in dream locations, improving conditions and party entertainment, tech companies were forced to suddenly stop on stops and quickly retrace their steps. The first impression came from “people with money,” some of whom were seniors with a lot of experience in crises, such as the big American Sequoia fund, which required companies to start making cuts quickly and adapt to the crisis that has occurred. Computer companies in the United States responded quickly and laid off about 20,000 employees in a very short time. Big companies like Robinhood and Coinbase, which are on the cross between technology and the big market, killed thousands in a single day. Big companies like Meta and Intel, whose stability isn’t intimidating, have also spread the word about hiring.
The restriction on the US was accompanied by declining investment and growing investor concerns. Even Alon Musk tweeted that the company he hoped to find should cut its staff soon. Finally, as usual, he hurried to calm everyone down, but the message of the tragedy had already been received.
In Israel, at least for now, these concerns have not had the same impact. So far, very few workers have been laid off here, and the number of laid-off people is estimated at a few hundred-and the vast majority of those repatriated into a business still need good employees.
However, it is important to investigate the reasons why many Israeli companies lay off workers so quickly. These factors explain the pressure that will be exerted on the Israeli technology market, and illustrate the potential for high -end business applications in the near future.
1. Entrepreneurs are accumulating weight – and the company wants to show leadership.
Investors are happy to see the company they have invested in take the lead and don’t sit still in the face of adversity, even when its funds are full of cash. Israeli company OpenWeb, whose administrators are based in the US, is very close to the company’s customers, an example of such heavy -handed releases. The company, which was built by the app to be able to talk on existing sites, raised $ 150 million last November. The company didn’t run out of money, but laid off 14 researchers and developers and reduced the salaries of its employees by about 20%, while the bonus was approved.
The layoffs of 14 employees are a drop in the bucket, and won’t hurt the balance much. If OpenWeb is in an emergency, the number of laid off employees is enormous. So why is this happening? In this case, the main issue is physical presence in the United States, which is a higher concern than Israeli money, for example. The early dismissal is proof that the company has a “hand on the coat,” and has the power to reassure customers.
At the same time, OpenWeb has announced that it is preparing for the future and is hiring new employees to increase its revenue through advertising. How is this possible? Well, here too, lies a message, directors inside and outside the company: our employees have nothing to fear and no need to look for outside opportunities, and nothing it worries our investors. We are moving towards increasing revenue.
The company’s CEO, Nadav Shoval, said: “Changes in the market require all companies, even those with investments, to make difficult decisions, re -examine investments and focus on ensuring growth. We have decided to invest more in the great opportunities we have in advertising and product information, at the expense of other investments. “
2. There is a lot of fat-and this is an opportunity to re-examine the purpose of business
Many companies have accumulated some fat in recent years. The marketing departments were filled with employees, consultants, assistants and insiders. Beginners hired workers even when there was no immediate need for them, because the demand and competition for good workers was crazy. The development department felt they were at war with all the other companies, and hired all the staff they could.
As a result most companies grew from twelve employees to a hundred, in a very short time. Some of them have resulted in difficulties in building an organizational culture or applying work organization among the company’s growing staff.
The crisis environment has now allowed them to reflect on the recruitment process that has already occurred and explore whether the current can be used to reduce staffing without compromising values. Elementor, for example, one of the world’s leading companies in the development of WordPress sites, has laid off about 50 employees, about 10% of the workforce. In a statement issued by the company he stressed that most of the marketing people and not the developers were fired. In the case of Elementor, the core business is maintained, and placed on rapid expansion.
Yoni Luxenberg, CEO of the company and co -founder: “We made a difficult decision to say goodbye to some of your talented and good friends. The world scene has changed, and there is a growing trend. the cost of the economy and the declining economy.We have embarked on a process of organizational change to facilitate some aspects of the company, while at the same time continuing to increase the supply of products to ensure success and growth for years to come. ”
Israeli -based company Deep Instinct, which has laid off about 40 customers in the United States, has also turned a lot of fat into an opportunity for a change in business focus: selling technology to organizations. large, at the expense of small and medium- large organizations. The company said: “A specific decision has been made to focus on the large organizations in which the company is benefiting. There is no and there will be no layoffs in Israel or other departments, and staff continue to be hired.”
3. The IPO is on the horizon – and it’s time to inform future investors
Cybereason is one of the most successful online companies in Israel. However, earlier this month it decided to lay off 100 employees, most of them outsiders. Why? The company’s shareholders have made it clear that the suspension is part of Cybereason’s preparations for a future IPO. The company submitted data to the U.S. Securities and Exchange Commission this year, ahead of a possible IPO in New York. Dismissing on the eve of an IPO is routine, and a step towards showing future investors that the company will reach out to them with the right staff and only the best people.
4. Giants aren’t afraid – but understand that sentiment in the markets has changed
In Israel, there are about 350 development centers of international companies. In fact, any well -known company in Silicon Valley, New York or Europe has a innovation center, an enterprise and even a business venture here. These centers are responsible for employing 50% of the high -tech industry in Israel, and in the opinion of many are responsible for high labor costs. Companies like Google, Meta, Amazon or Intel can offer paid employees that few young companies can offer, and increased competition has led giants to add thousands of employees. in recent years.
But even large companies know that the coming years may not be easy. Intel has announced a suspension in hiring in some areas, Meta has announced a suspension in hiring and other companies are the rate of employment is slowing. Do they also lay off employees? The review will not happen immediately. Most of them will have a very difficult time renewing themselves in the future, and dismissal also has a heavy organizational cost. Therefore, it is estimated that most large companies will be content to stop the influx of workers into Israel, in order to be able to explore real needs in depth. Small development centers, on the other hand, are far from the heart of the older companies, can become burdensome and eventually close, as has happened in a few cases in the past. past.
5. The issue of AVO – entrepreneurs need a way to make a profit
In the period before 2022, many entrepreneurs set up companies and models that relied heavily on investment, hoping to pay back. Many companies in the field of transportation, for example, are still losing money on their customers, and most of the money falls on consumers. One such company is AVO, which has developed a model of fast delivery to companies and residential properties. Its model was built on gathering a large number of customers in each region, so that the cost of shipping and the cost of goods sold would generate a profit.
The company arrived earlier in the year after receiving little money from top investors such as Kleiner Perkins and Insight. His administration, led by Dekel Valtzer, knew that without major measures the company would not survive, so in a short period of time many of AVO’s hundreds of employees in Israel and New York was laid off, but only 20 employees, should be a future. skeleton for the company – on the assumption that a good model will be available one day.
The AVO case is a clear demonstration of a change in the entrepreneurial perspective: they want to see a real business model, revenue base, with a summary that leads to revenue. At the peak of the world of delivery and transportation, only a few companies will be able to provide such an example. AVO and things like that may not be with them.
6. The future is not clear — so whoever burns cash will never get it again.
Israel’s response to disasters is often delayed. If in the United States employees are fired via email while waiting for their belongings to enter the office, in Israel there is a higher hearing for those who have been fired, and most companies they see this as a last resort. They will want to reduce the welfare budget or cut temporary salaries for staff and administration. Therefore, big waves of shutdowns and closures of companies will come when companies that are trying to put money into the hedge, find that they have no choice but to downsize. the staff.
And it’s not just the difficulty of making money that will be the sign. Similar to OpenWeb, which chose the not -so -easy step of shooting R&D people, many companies will prefer on difficult days to focus solely on sales, which generates revenue. Everything else will be pushed away. The name of the game in the near future is cash and whoever burns the most cash can spend it back. In contrast, those who generate money are very important to the organization.
But it continues to hire – because it’s clear to everyone that there will still be a shortage of good employees.
And even after all this, the recruitment of tech workers in Israel is not expected to stop. Few good R&D workers and good customers will remain unemployed for a long time. There is a huge demand for industrial workers and it is indicated that many companies are looking for workers.
Assaf Rappaport, for example, CEO of the online company Wiz, told Calcalist that he is thirsty for development workers and also does not expect a pay fall.
Yuval Tal, one of the largest fintech entrepreneurs in the country, also doesn’t believe we’ll see more technologists out of work. A few companies – for example the large American KLA – as well as many companies online, continue to employ employees to this day.
This situation will change when a deep downturn occurs, especially in the US market. A show like that could create an emergency that would severely damage Israel’s high -tech industry, which relies heavily on sales in the United States. American market. Then there will be more companies that will be forced to cut activity, lay off employees, and in some cases even close.
What are reasons to lay someone off?
Reasons for Healing
- Reducing costs. The most common reason for dismissal is to reduce costs in some way. …
- Staffing Reductions. Employees may be laid off if they have to cut their positions due to overstaffing, overseas employment or a change in duties. …
- Repeat. …
- With or With Buy.
Can you fire someone without a reason? Jobs in California are often referred to as “at-the-will”. This means that employers and employees can terminate their employment at any time, for any legal or non -legal reason.
How do companies decide who to lay off?
Decisions That Basis Laying Decisions One of the best things about your career. Most organizations will first lay off employees who have been with the company for a short period of time. If this is you, there is not much you can do to help your situation. Another important aspect of the job.
Are layoffs based on seniority?
Dismissals Seniority is important when employers make the unfortunate decision to lay off employees. Employment lawyers recommend seniority to be a part of their dismissal decisions. Dismissed workers are also less likely to be harassed by employers on the basis of age discrimination.
Why might a company decide to lay off employees?
There are many reasons to lay off companies, such as restructuring, poor revenues, and relocation to low -cost areas. To keep things simple, the “bottom line,” that is, is cost savings.
Why would someone get laid off?
Layoffs occur when a company is restructured or downsized or goes out of business. In some cases, retired employees may be entitled to retirement benefits or other employee benefits provided by their employer. Generally, when employees resign, they are entitled to unemployment benefits.
Is being laid off a good thing?
Dismissal is not as bad as dismissal, but it can still cause a lot of professional and technical problems over a long period of time and. permanent. In some cases, dismissal can be a good thing, or bring significant benefits.
What does it mean if you have been laid off?
If you are fired, it means the company thinks they are at fault. For example, a professional may be fired for being late, theft or other forms of misconduct. If you are fired, you must ensure that you are given the reason for termination in writing.
How common is being laid off?
The good news -if you want to call it that -is that dismissal is a common occurrence. About 26% of employees are affected by them, according to outsourcing company Airtasker. If you’re limited, here’s how to pick up pieces. Losing a job doesn’t have to ruin your money.
What is the month in which most people are healed? Summary of Findings: January is the month of the year with many healing and healing. January saw more than 2.1 million layoffs and dismissals in the last five years. January accounts for more than 10% of all layoffs and layoffs.
Is it better to be laid off or quit?
Don’t get fired or quit your job. Instead, dismiss it. If you terminate or be fired, you will receive no benefits. But if you retire, you can get a retirement, unemployment benefits, assisted health insurance, health insurance, and much more.
How do companies decide who gets laid off?
Decisions Are Always Based on Correctional Decisions. Most organizations will first limit employees who have been with the company for a short period of time. If this is you, there is not much you can do to help your situation. Another important aspect of the job.
Are layoffs based on seniority?
Dismissals It is important when employers make the unhappy decision to lay off employees. Employment lawyers recommend seniority to be a part of their dismissal decisions. Dismissed workers are also less likely to be harassed by employers on the basis of age discrimination.
Who is first to go in a layoff?
The three basic principles are: “end in, first out” (recently recruited employees first), performance appraisal or directive. maybe.
Is being laid off a good thing?
Dismissal is not as bad as dismissal, but it can still cause a lot of professional and technical problems over a long period of time and. permanent. In some cases, dismissal can be a good thing, or bring significant benefits.
Why Getting laid off is a good thing?
But if you retire, you can get a retirement, unemployment benefits, assisted health insurance, health insurance, and much more. A baby panda dies in the woods every time you leave your job or chase. It’s best to negotiate a divorce and put your own terms and money in your pocket!
How does being laid off affect you?
Studies show laid -off workers are more susceptible to a wide range of adverse effects, including mental and physical health problems, lifestyle and social impacts, and family stressors.
How long can a company lay you off for?
Employers can extend the suspension beyond 13 weeks but must be less than 35 weeks in any 52-week period. Normally, if employers want to take advantage of layoffs, they must continue to extend benefits to the employee at that time, even though the employee may not be paid.
Can my employer dismiss me without pay in the UK? You can fire an employee (ask them to stay home or take unpaid leave) if you can’t give them a paid job – if you can’t. authorized by the employment contract. Short -term work is the period in which an employee works reduced hours or pay less than half a week’s pay.
What do you get when you are laid off?
In some cases, retired employees may be entitled to retirement benefits or other employee benefits provided by their employer. Generally, when employees resign, they are entitled to unemployment benefits. In some cases, the retirement may be temporary, and the employee is re -employed when the economy improves.
What is it called when you get laid off and get money?
What is Severance Pay? Dismissed employees often receive paid work. This is the amount of cash that is earmarked to help with the choreography of losing one job and gaining another. It is not uncommon to offer retirement benefits to laid -off employees or those offering immediate retirement opportunities.
What happens when you get laid off Canada?
The resignation is terminated, and the employer must pay the termination fee to the employee. In addition, compensation must be provided in lieu of notice. Part III of the Canada Labor Code provides a procedure for making complaints against dismissal that an employee considers unfair.
How do companies decide who to lay off?
Decisions That Basis Laying Decisions One of the best things about your career. Most organizations will first lay off employees who have been with the company for a short period of time. If this is you, there is not much you can do to help your situation. Another important aspect of the job.
How does HR know who to fire? Professional employees in your organization, such as contract and/or part -time employees, will be laid off, but your employees have four permanent positions. priority in keeping their jobs.
Are layoffs based on seniority?
Dismissals Seniority is important when employers make the unfortunate decision to lay off employees. Employment lawyers recommend seniority to be a part of their dismissal decisions. Dismissed workers are also less likely to be harassed by employers on the basis of age discrimination.
What month do most layoffs occur?
Over the 10 years we looked at it, December was up 12.6% of the annualized total and January at 12.2%. If the number of vacations is advertised together throughout the year, the monthly total is 8.3%.
Which employees should be laid off first?
1) Senior Foundation Selection This is one of the easiest ways. In fact, the last employees are hired as the first to deliver.
Why might a company decide to lay off employees?
There are many reasons to lay off companies, such as restructuring, poor revenues, and relocation to low -cost areas. To keep things simple, the “bottom line,” that is, is cost savings.
Why would a company decide to lay off employees quizlet?
Bad economic times, declining revenue, or merging with another company – these are just a few examples where a company may choose to downsize. Decreases often have a negative effect because they are associated with large expulsions.
Are layoffs based on seniority?
Dismissals Seniority is important when employers make the unfortunate decision to lay off employees. Employment lawyers recommend seniority to be a part of their dismissal decisions. Dismissed workers are also less likely to be harassed by employers on the basis of age discrimination.
What month do most relaxations happen? Over the 10 years we looked at it, December was up 12.6% of the annualized total and January at 12.2%. If the number of vacations is advertised together throughout the year, the monthly total is 8.3%.
Which employees should be laid off first?
1) Senior Foundation Selection This is one of the easiest ways. In fact, the last employees are hired as the first to deliver.
What is the best day to layoff employees?
While opinions are divided, many experts say Tuesday is the best day for layoffs (all things considered) and the Wednesday and Thursday are the second best days. Employees who have been laid off report that once they are told they have been fired, they are unable to make further statements.
Who is the first to go in layoffs?
The three basic principles are: “end in, first out” (recent employees have been hired first), performance appraisal or directive. maybe.
