In one of the most dramatic weeks for Israeli high-tech in recent memory, four major technology companies announced workforce reductions totaling thousands of positions over 48 hours. The moves, widely attributed to the accelerating impact of artificial intelligence on software development roles and the soaring strength of the shekel, have been dubbed "Black Thursday" by local media.

Wix Cuts 20%: "Faster, Leaner, Flatter"

Wix.com, the Israeli website-building giant, announced it is cutting approximately 1,000 jobs — about 20% of its global workforce — in the deepest layoff round in the company's history. CEO and co-founder Avishai Abrahami shared the news in an internal memo posted publicly on X, citing two driving forces: the rapid evolution of AI capabilities, which has made certain development and design roles redundant, and the strengthening of the Israeli shekel, which has made Wix's largely Israel-based workforce significantly more expensive in dollar terms.

The company, which employed 5,277 people at the end of Q1 2026, will shrink to roughly 4,200. Reports indicate the cuts will primarily hit development and design roles that AI can now automate, while the company expands new positions such as "xEngineer" focused on AI-centric tools and workflows.

The stock is down nearly 50% year-to-date amid weak Q1 earnings and rising AI infrastructure costs.

Layoff Wave Spreads: Lightricks, BigID, PayPal

Jerusalem-based unicorn Lightricks is preparing additional layoffs of dozens of employees as part of an organizational overhaul driven by the shift to an AI-native operating model. The company had already conducted two previous layoff rounds.

BigID, the data security unicorn, announced it is cutting 20% of its workforce as part of a transition to an AI-first strategy, reorienting product development around artificial intelligence while reducing traditional roles.

PayPal also notified employees at its Israel development center, which employs hundreds of engineers and data scientists, of impending layoffs as part of a global restructuring effort.

Counterpoint: Big Rounds for Young Startups

While established companies cut back, younger startups are raising significant capital. Airis Labs, an AI defense-tech company, emerged from stealth with a total of $60 million raised to date, including a $31 million Series B led by PSG Equity. Founded in 2023, the company's AI platform converts unstructured visual data from body cameras, drones, smartphones, and social media into real-time operational intelligence. The platform is already in use by government organizations worldwide.

Phytolon, a biotech startup developing natural food colors through fermentation technology, raised $23.6 million in a Series B round. The company is targeting the U.S. market as an alternative to synthetic dyes.

M&A: Cyera Buys a 5-Month-Old Startup, Elbit Acquires Bluewhite

In M&A activity, Cyera, the cybersecurity unicorn valued at approximately $9 billion, acquired Genie Security — a five-month-old Israeli startup with just five employees — for an estimated $50 million. Genie Security developed an endpoint data loss prevention (DLP) solution that will be integrated into Cyera's AI-driven data security platform. This marks Cyera's fifth acquisition.

Elbit Systems acquired Bluewhite, an Israeli company that developed an AI-powered ground autonomy platform with over 100,000 hours of operational use. The acquisition strengthens Elbit's push into unmanned systems across air and land domains.

The Strong Shekel: A Growing Headwind

The Bank of Israel faces a balancing act: inflation is cooling, but the shekel's surge — up more than 20% against the dollar over the past year — is squeezing tech companies that pay salaries in shekels while reporting revenue in dollars. Analysts warn that if the shekel continues to strengthen, further rounds of cuts are likely across the sector.

The Bottom Line

Israeli tech is undergoing a structural shift. Established companies are deep-cutting in response to an AI-driven transformation of employment economics, while venture capital continues to flow to young startups, particularly in cybersecurity, defense-tech, and biotech. The open question: how far will the layoff wave go before the market rebalances itself?