Forecast: Hi-tech companies to lay off 7,000 workers

"Over the past four months, we have seen a worrying trend in the rise of the layoffs of workers with an academic degree."

By SHARON WROBEL
November 25, 2008 10:32
1 minute read.
hi tech 248.88

hi tech 248.88. (photo credit: Ariel Jerozolimski)

The number of job seekers rose in October and more layoffs are expected, particularly in the hi-tech sector. "During the month of October, the number of job seekers rose by 1.1 percent in seasonally adjusted terms to 193,200, up from 191,100 the previous month," National Employment Service director Yossi Farhi said Monday. "Over the past four months, we have seen a worrying trend in the rise of the layoffs of workers with an academic degree," he said. "About 11,005 unemployed were added during the period, compared with 9,020 during same period last year, an increase of 22 percent. The total number of workers put out of work over the past four months was 53,112, compared with 45,896 during the same period last year." There were 15,300 new job seekers over the past 12 months, and 70% of them were workers who had lost their jobs, Farhi said. Some 35,000 layoffs are expected in the hi-tech sector, as 73% of local hi-tech companies plan to cut 10% to 15% of their staff, according to a survey by the Israel Association of Electronics and Software Industries. The survey was conducted among 46 hi-tech companies, of which 62% had at least 100 employees and annual sales of $50 million. It showed that most were suffering from credit problems with the banks. If the global economic and financial situation continues, the surveyed companies said they would expect a decline in sales of 11% on average, or $3 billion, in 2009. "Based on the findings of the survey, we expect 7,000 people to be laid off directly from hi-tech companies and 28,000 from companies that provide services to the sector," IAESI chairman Yehuda Zispel said Monday. "This situation will make it difficult for the 8,000 students who graduate each year from academic institutions related to the hi-tech industry to find work. As a result, we could see more of the brain drain and a fall in the number of students in academia studying engineering, mathematics and computer sciences." In recent years, the hi-tech industry has grown fairly healthily by an estimated 10%-15% year-on-year, and similar growth was expected in 2008, he said. "However, following the exceptional sharp appreciation of the shekel, we expect to end 2008 with a 10%-15% drop in shekel-denominated revenues," Zispel said.


Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection

By GLOBES, NIV ELIS