Israel’s high-tech sector is a cornerstone of the country’s economy, accounting for around 14% of jobs and almost a fifth of the national GDP. For a decade, it has been Israel’s fastest-growing sector.

The country's usually vibrant technology industry has a global reputation as being a leading light when it comes to its innovation in fields including e-commerce, security and artificial intelligence. Like other industries around the world, the COVID-19 pandemic, subsequent inflation and the invasion of Ukraine have led to a downturn in the sector. But it has become more pronounced this year due to instability in Israel’s domestic politics.

Preliminary data from the IVC Research Center and LeumiTech showed on Wednesday that fundraising for Israeli technology firms fell more than 65% in the second quarter from over $5 billion in the same period in 2022.

Layoffs have become commonplace too. On Tuesday, Alphabet-owned Google announced it was cutting jobs at Israeli-founded mapping app Waze, as it merges the app’s advertising system with Google Ads technology.