Wix cut 1,000 people. The Bank of Israel spent nearly $2 billion in two months trying to slow the shekel. A former central bank supervisor warned Israeli tech could shrink 25–30% within six months. The story English business press is still framing as an AI cycle.
Wix cut 1,000 people. The Bank of Israel spent nearly $2 billion in two months trying to slow the currency. A former central bank supervisor warned the sector could shrink 25–30% within six months. The story English business press is still framing as an AI cycle.
When Wix CEO Avishai Abrahami explained why he was cutting 1,000 employees, the first reason he gave was not artificial intelligence. It was the shekel.
On May 28, 2026, Abrahami posted a letter to employees and to the public: “A very meaningful portion of our costs are shekel-denominated, while our revenue is largely dollar-denominated.” He called it “structural pressure on our ability to operate at our current scale.” It is the deepest layoff in Wix’s history — roughly 20% of the company. Wix stock is down more than 50% year-to-date.
Abrahami is not alone, and Wix is not an outlier. One of the most consequential — and most underreported — drivers of Israel’s 2026 tech contraction is the exchange rate.
A former Supervisor of Banks: 25–30% within six months
On June 2, 2026, at the Israel Democracy Institute’s Eli Hurvitz Conference on Economics and Society in Jerusalem, Dr. Hedva Ber — Israel’s Supervisor of Banks from 2015 to 2020, now Deputy CEO of eToro — put the scale on the record, in remarks reported by Calcalist:
“Within six months, Israel’s high-tech sector could shrink by 25% to 30%. If an emergency task force is not established to examine all monetary and fiscal policy options, we will see more of the industry leave Israel. Some of it is already leaving today. High-tech companies have alternatives, and the locomotive of the Israeli economy is beginning to move elsewhere.”
A former central bank supervisor calling for an emergency task force is not a routine conference line. It ran in Calcalist and the Jerusalem Post. It did not cross into the major English business wires as its own story.
The mechanics: dollars in, shekels out
The shekel has strengthened roughly 20% against the US dollar over the past twelve months. The dollar broke NIS 2.9 in May and briefly touched NIS 2.799 at month-end — a 33-year high for the shekel. Q1 2026 export revenue was down more than NIS 6.5 billion year-over-year.
Israeli startups raise capital in dollars and pay salaries in shekels. A 20% currency move compresses runway by roughly the same amount with zero change in product, traction, or team. Calcalist’s Noam Canetti reported on May 24 that venture funds are advising portfolio companies to cut Israeli headcount at least 10% ahead of fundraising — not for performance reasons, to present leaner cost structures. Founders are being told, in Canetti’s reporting: “Show lower dependence on Israel and lower shekel-based employment costs.”
Haim Sadger, founding partner at S Capital and formerly Sequoia’s representative in Israel, told Calcalist: “The shekel issue is now the central topic in startup boardrooms because suddenly companies have less money.”
The Innovation Authority’s own numbers
Two days before Ber’s warning, the Israel Innovation Authority published its 2026 High-Tech Status Report. Global coverage led with the headline figures: $85 billion in exports, $84 billion in exits, nearly $15 billion in fundraising. Buried in the same report are the numbers that matter more:
- Only 62% of employees at private Israeli tech companies work in Israel as of March 2026, down from 69% in January 2019.
- The share of C-suite executives based in Israel is down 9.6% since 2019.
- The first decline in a decade in Israeli R&D headcount — roughly 3,500 development jobs eliminated.
- 35% of Israeli tech companies reported an increase in employee relocation requests at the end of 2025 (IIA-Zviran survey).
- The Authority’s own simulation: a drop in the average dollar rate from NIS 3.70 in 2024 to NIS 3.45 in 2025 translated into a NIS 21 billion reduction in high-tech GDP — about 1.1% of Israel’s total GDP.
Outgoing Innovation Authority CEO Dror Bin, to the Times of Israel on May 31: “Israeli high-tech became so successful that now it’s coming back to bite it, because it created such an influx of investments coming into Israel, which changed the shekel-dollar exchange rate, and Israeli high-tech has to adapt.”
The numbers, in one place
| Indicator | Figure | As of |
|---|---|---|
| Shekel vs. US dollar, 12-month move | Shekel ~20% stronger; USD/ILS touched NIS 2.799 | May 2026 |
| Wix layoffs | ~1,000 employees, ~20% of workforce | May 28, 2026 |
| Israeli R&D employees (first decline in a decade) | ~3,500 R&D jobs eliminated | IIA 2026 report |
| Share of Israeli tech workforce based in Israel | 62% (vs. 69% in Jan 2019) | March 2026 |
| Q1 2026 export revenue impact from stronger shekel | Down >NIS 6.5 billion YoY | Q1 2026 |
| IIA GDP simulation (NIS 3.70 → 3.45) | NIS 21B reduction in high-tech GDP (~1.1% of GDP) | IIA 2026 report |
| Bank of Israel FX intervention (first since 2022) | $801M in May + $1.027B in June | May–June 2026 |
| BoI benchmark rate | Cut to 3.5% | July 7, 2026 |
| BoI 2026 inflation forecast | Cut from 2.2% to 1.8% | July 7, 2026 |
The clincher: the central bank blinked twice
The Bank of Israel had not intervened in the FX market since 2022. In May 2026 it bought $801 million to slow the shekel. In June it bought another $1.027 billion. Both figures come directly from the central bank’s own monthly foreign exchange reserves reports, dated June 8 and July 7, 2026. Nearly $2 billion of intervention in eight weeks.
On the same July 7 schedule, the Monetary Committee cut the benchmark rate 25 basis points to 3.5% — the second cut of the year — lowered the 2026 inflation forecast to 1.8% from 2.2%, and signaled a 3.0% rate in twelve months.
Governor Amir Yaron, speaking at the Hurvitz Conference: “As inflation expectations decline and approach the lower end of the target range, this justifies a more expansionary monetary policy at a faster pace.” Yaron also conceded that much of the shekel’s strength is beyond the central bank’s control. A central bank that had refused to intervene for three years did so twice in eight weeks. That is the hardest single data point in the file.
The Startup Nation problem
Israel built a technology economy successful enough to strengthen its own currency. Now that currency is making it more expensive to build technology companies in Israel.
The threat to the Startup Nation is not that companies are cutting jobs. It is that the next jobs may never be created there.
Sources
- Wix CEO blames strong shekel for layoffs — Globes, May 28, 2026
- Wix confirms 20% layoffs as CEO warns of AI era reset — Calcalist / Ctech, May 28, 2026
- AI part of another tech layoff as Wix CEO announces 20% workforce cut — CNBC, May 28, 2026
- Israel’s tech boom faces an unexpected threat: its own currency — Calcalist / Ctech, May 24, 2026
- “Within six months, Israel’s high-tech sector could shrink by 25% to 30%” — Calcalist / Ctech, June 2, 2026
- Tech workers laid off and collapsing under the mortgage burden — Jerusalem Post, June 2026
- After record year, Israeli tech brain drain raises fears for future growth — Times of Israel, May 31, 2026
- The great high-tech shift: Israel’s startups grow, but not necessarily in Israel — Calcalist / Ctech, May 31, 2026
- Israel Innovation Authority 2026 High-Tech Status Report — official announcement, May 31, 2026
- In first since 2022, Bank of Israel buys foreign currency to stem sharp shekel gain — Times of Israel, June 7, 2026
- Bank of Israel intervenes in forex trading again — Globes, July 7, 2026
- Bank of Israel continued to intervene in foreign exchange market in June — Calcalist / Ctech, July 7, 2026
- Israel’s Central Bank Intervened in FX Trade to Curb Shekel — Bloomberg, June 8, 2026
Ronn Torossian is the founder and chairman of 5W AI Communications, the AI Communications Firm. He is the publisher of Everything-PR and the author of two best-selling editions of For Immediate Release.