The last week of May 2026 paints a complex portrait of the Israeli high-tech ecosystem: major layoffs at Amdocs, an Innovation Authority report showing record fundraising and output, and dozens of startup funding rounds closing this month.

Amdocs: Third Layoff Round in Three Years

Amdocs (NASDAQ: DOX), the telecom software giant, is preparing to cut 2,700–3,000 jobs globally — about 10% of its roughly 29,000-strong workforce. Reports from Calcalist, Globes, and Ynet indicate the cuts include hundreds of positions in Israel, where the company employs approximately 5,000 people.

This is Amdocs's third layoff wave since 2023: roughly 2,700 jobs were cut that year (300 in Israel), followed by over 1,500 cuts in 2024 (about 100 in Israel). The current round is part of a broader reorganization under new CEO Shimie Hortig, who took office in March 2026, aimed at adapting the company for the AI era. Amdocs has not issued a detailed official announcement but confirmed the process in response to media inquiries.

Amdocs joins a broader trend in Israeli tech: Wix announced plans to cut roughly 1,000 jobs (20% of its workforce), and companies like Rapyd have also conducted cuts. These are partly driven by AI adoption, which boosts productivity and reduces headcount needs.

Innovation Authority Report: Growth Alongside Structural Challenges

The Israel Innovation Authority's 2026 State of High-Tech Report (covering 2025 data) reveals strong metrics alongside warning signs:

  • Fundraising hit $14.6 billion in 2025 — a 30% increase year-over-year and the highest since the 2021–2022 peak.
  • Tech sector output reached NIS 352 billion ($95 billion), accounting for 18.3% of GDP — an 8.2% real increase. The sector contributed roughly 50% of Israel's economic growth.
  • High-tech exports crossed $85 billion, representing 58% of total Israeli exports.
  • Employment grew to over 400,000, up 2.3% from 391,000 in 2024.
  • Q1 2026 saw $3.36 billion raised, continuing the momentum.

However, the report flags concerning structural shifts: the share of tech employees working in Israel at private Israeli tech firms dropped from 69% in 2019 to 62%. R&D jobs in Israel declined for the first time in a decade — about 3,500 were lost — as roles shifted toward product positions. Outgoing Innovation Authority CEO Dror Bin noted that Israel faces a crossroads, needing to address brain drain, the erosion of local R&D centers, and the impacts of ongoing geopolitical challenges.

May 2026: A Wave of Startup Funding

May was particularly active for fundraising. Notable rounds include:

  • Airis Labs — A secretive defense-tech startup building an AI platform for battlefield visual intelligence, emerged from stealth with $60 million in total funding, including a $31 million Series B led by PSG Equity.
  • ZyG — An AI-powered growth engine founded by ex-ironSource executives, raised $60 million at a $500 million valuation.
  • Unframe — An AI startup founded by former Noname Security executives, raised $50 million in Series B after signing over $100 million in contracts.
  • Frame — A cybersecurity startup for security awareness training (ex-Wiz and Team8 founders), raised $50 million.
  • Phytolon — A biotech company producing fermentation-based natural food colors, raised $23.6 million in Series B and plans US market expansion.
  • Ocean — A cybersecurity startup using AI agents for email phishing defense, raised $20 million in Series A.
  • NVision Quantum — An Abbott-backed quantum startup, raised $55 million, expanding from quantum MRI into quantum computing for drug development.
  • Tribal — An enterprise AI agent platform founded by former Salesforce, Wix, and Spot.io executives, raised $10 million with Team8 backing.
  • Rep AI — An ecommerce AI company, raised $6.2 million in a follow-on round, with Zendesk making its first Israeli startup investment.
  • Kela Technologies — A defense startup building an OS to integrate military systems, raised ~$200 million at a ~$1 billion valuation, backed by Bill Ackman and Eric Schmidt.

The Big Picture

Q1 2026 closed with $3.1–4.3 billion in total fundraising (depending on the source), with cybersecurity, AI, and defense-tech accounting for the bulk of activity. Eleven mega-rounds represented 53% of all capital raised. Meanwhile, the M&A market remains active: Apple (Q.ai for $1.5 billion), Credo (DustPhotonics for up to $1.3 billion), and Cisco (Astrix for $400 million) have all acquired Israeli companies this year.

As outgoing Innovation Authority CEO Dror Bin summarized: "Israeli high-tech continues to demonstrate extraordinary resilience, but we cannot ignore the structural challenges. Future growth depends on maintaining R&D centers in Israel and addressing the erosion of the local workforce."