Lilach Weissman reported on Globes online yesterday that Ministry of Industry, Trade and Labor director general Gabriel Maimon told the Knesset Economics Committee that 4,000 high-tech employees have lost their jobs since October, and that the number could reach 15,000 (out of a total of 70,000). A day earlier, Roi Carthy posted an entry on TechCrunch that Deloitte Israel recently released its VC Indicator Survey, conducted among Israeli VCs in December that he said, spelled doom for the industry regarding employment and funding.
While times will be tough in Israel regarding the economy this year, it doesn’t seem likely that most of those unemployed in the high-tech sector will sit by idly. Eze Vidra of VCCafe.com reported in early December 2008 that of the 270 startups founded in Israel in 2008, 40 of them were founded in a 30-day span in November and beginning of December. It seems that once laid-off and with time, several high-tech workers are able to pursue their ideas. (How many laid-off employees out of the 15,000 this will acutally benefit should be kept an eye on in 2009.)
While venture capitalists will be more conservative in their investments, this past September a panel of angel investors at TechCrunch50 basically said that this is the time for them. Though there’s less money going around, especially coming from VCs, there’s still money out there for the right ideas. (There’s also still some investments in R&D-type activities that are being made in Israel.)
Here are some facts from Carthy’s entry and the Globes article that are particularly of interest:
- 92% of VCs surveyed believe that companies who do not lay off employees will slash salaries.
- 74% predict that at least 10% of venture backed startups will be shutdown.
- 95% foresee harsh times in the fund raising department.
- 54% expect a slowdown in seed investments.
- 87% expect a decrease in company valuations.
- According to the Globes article, every high-tech employees supports 4-6 employees in business services sectors.
- Total cost of layoffs could reach NIS 12 billion a year.
- High-tech industry employs 70,000 people directly, such as engineers, programmers, and R&D staff, and 300,000 people indirectly, such as subcontractors, lawyers, accountants, catering and cleaning staff.
