“Insane damage and a macroeconomic drama”: How AI and outsourcing are killing junior jobs
Employers say they want talent, but they’re not hiring fresh graduates.
Only 360 junior employees entered Israel’s high-tech industry last year, out of approximately 6,500 university graduates who complete relevant degrees each year. In the midst of one of the most severe crises the industry has faced, young people are confronted with dwindling chances of integrating into what has long been considered the engine of the Israeli economy. Just this week, a special report by the Employment Service revealed that the number of job seekers in high-tech professions has more than doubled, from 7,000 in January 2019 to 15,000 in April 2025, and these figures likely understate the depth of the crisis, as they do not typically include entry-level candidates.
As technology companies increasingly move jobs abroad or prefer to hire only experienced talent, an entire generation of early-career workers finds itself left out. Company initiatives to recruit juniors, train them, and absorb students do exist, but they are little more than a drop in the ocean: a desperate attempt to prevent the emergence of a lost generation.
The juniors’ situation is made worse by a slowdown in hiring and widespread layoffs, combined with the rapid adoption of artificial intelligence and the offshoring of many Israeli tech jobs. “Basically, we know that every job opened abroad instead of in Israel represents a loss of about one million shekels a year to the state,” explains Einath McMurray Aharon, a partner at the Portland Trust, which promotes the integration of juniors in Israel’s periphery. She says the rate of high-tech jobs moved abroad has jumped dramatically, from 25% in 2018 to 52% today, calling it “insane damage and a macroeconomic drama.”
This challenge is not unique to Israel. Globally, the rise of AI means fewer tasks require junior-level skills; basic programming and maintenance work can increasingly be automated. In Israel, these global trends are compounded by the ongoing war, widespread reserve duty, and companies’ need to ensure business continuity by shifting operations overseas.
“What’s happening is that AI has caused companies to stagnate their hiring. They are examining every position carefully before recruiting. They don’t want to be ‘suckers’ paying for roles they don’t truly need. Naturally, juniors, at the bottom of the food chain, are the first to be cut, because no one wants to invest time teaching them, and they are perceived as less productive,” says McMurray Aharon. “What we are trying to show companies, and we have seen some success in recent months, is that these juniors are actually AI natives. They grew up with AI, and they are exceptionally fast at learning and applying new tools. We already hear from managers at large companies like Wix, NICE, Monday, Amdocs, and Nova that juniors coming through our programs are introducing AI to teams and even teaching senior staff, bringing innovation and creating value.”
Israel’s high employment costs have driven companies abroad for over a decade, setting up overseas development centers staffed with “cheaper” workers, taking tax income out of Israel’s economy. While other countries actively incentivize companies to hire young local talent, Israel’s government has moved in the opposite direction, slashing support for underrepresented populations in high-tech from 58 million shekels to just 6 million.
According to the latest Israel Innovation Authority report, there are about 17,000 open positions in high-tech, but only 10% are entry-level, and even these include overseas roles. The squeeze on juniors is stark: 38% of those laid off in tech since before the war have been juniors.
“Juniors cost much less, and with the right incentives, hiring them can compete with the costs of offshore employment in Eastern Europe. But the reality is that stagnation and employers’ reluctance to train young people persist,” says McMurray Aharon.
Even companies still hiring juniors acknowledge the challenges. “As a company that recruits developers, data scientists, DevOps and more, and works with the top tech companies and startups in Israel, we see that the demand for juniors has changed a lot,” says Shmulik Segal, VP Cloud at Sela, a global provider of cloud and AI services. “It’s clear we no longer hire ‘anything that comes along’ as we did during the bubble years. We still hire juniors, but the bar is very high.”
The trend could have wider macroeconomic impacts. Each junior role filled in Israel generates between two and six additional supporting jobs in peripheral regions. If Israel wants to maintain its status as the “Startup Nation,” it must think ahead. “If we don’t integrate the next generation into the industry today, there will be a significant talent shortage in a few years,” Segal warns. “We chose a creative solution: to find high-potential juniors without prior experience and pair them with experienced developers. In the past, juniors needed proven technological skills; today, the ability to learn quickly and master AI tools is sometimes more critical. We even prefer people with no preconceptions who show mental flexibility and curiosity.” Sela has hired eight juniors in recent months, a slight drop compared to previous years.
The situation varies by company type. Product companies, especially exporters, have reduced junior hiring due to slowdowns and rapid technological advances, while software service companies still seek early-career talent. “With the rise of AI and process automation, there’s a clear split in the market,” says Dagan Halevy, CEO of Elad Systems. “Product companies are cutting back, but services firms have a major shortage of people.” Some fill the gap with outsourcing, mainly from Eastern Europe; others, like Elad, prefer to recruit and train Israeli juniors in dedicated courses.
AppsFlyer, the mobile analytics company, has launched a training program for 15 juniors who will be placed in development roles. It targets undergraduates in engineering, with a three-month track combining group and personal training and a focus on AI tools and applications.
“There’s a perception that much of the simple development work that juniors used to do, bug fixes, feature tweaks, maintenance, will now be done by AI, and that companies therefore only need experienced developers to supervise the AI and verify the output,” says Ruli Weisbach, VP of R&D at AppsFlyer. “While that’s partly true, I believe AI-assisted development demands a new mindset. Juniors without rigid habits can sometimes adapt more easily than seniors used to traditional methods. The key is balance.”
Salesforce also runs a student program in Israel for 10–20 students each year. Recruits complete initial training in Dublin, then join local teams in Israel at 60% capacity for a year, with the goal of absorbing as many as possible into permanent roles. “For us, Futureforce is more than an internship, it’s a way to identify and train the next generation,” says Einat Frish, Senior Manager, Tech Recruiting EMEA.
Unicorn Aqua Security, based in Ramat Gan, has also expanded its student recruitment track, targeting high school graduates and students for internships during their studies, with the aim of hiring them full time after graduation. “This is how we grow the next generation of developers,” says Ayelet Ben-Jonathan, HR Specialist at Aqua’s.
Deloitte Israel is recruiting 35 juniors for AI roles this year as part of a larger intake of 70 employees. These new recruits will receive targeted training, and Deloitte plans to launch a dedicated AI training track for juniors soon, adding about 20 more hires. “We already see AI transforming industries, overturning old models,” says Shahar Bracha, Partner, Portfolio Lead - Engineering, Data & AI at Deloitte Israel. “This is just the first step in our plans to build Israel’s leading AI development workforce.”
Yet even if you add up all these training programs, they barely scratch the surface of demand. Today’s graduates face the same trap as before: you can’t get a job without experience, and you can’t gain experience without a job. If government support continues to shrink and companies keep moving overseas, Israel may soon face not just a crisis, but an entire lost generation.
