When tech companies laid off en masse in 2022 and 2023, the explanation was simple: rates rose, cheap money ended, companies over-hired during Covid. It was a crisis, and crises end. The 2026 layoff wave is different, and it matters to understand why, because the difference decides what happens to thousands of tech workers, in Israel too.
Look at the list from recent months. Canva, one of the world's most successful software companies, is hitting 22% of staff. monday.com cut about 20%. Atera about 10%. Qualcomm is laying off based on performance reviews, with its CEO writing that the aim is 'a stronger performance culture'. These are not collapsing companies; most are profitable or close to it. They are cutting because they decide they can, and should, work with fewer people.
That decision rests on two assumptions. First: AI tools let you do more with less. A developer with coding agents delivers more; a service team with a bot needs fewer agents. Second, and less discussed: investors reward it. A company announcing a 'shift to AI' and better profitability often gets a stock bump, the opposite of how layoffs were received in the past.
Yes, there is also 'AI washing': some companies use AI as a convenient explanation for cuts driven by slower growth, investor pressure or, in Israel, the strong shekel. But that actually strengthens the point: even when AI is not the reason, it has become an accepted justification. And what is acceptable to justify gets done more.
What does it mean for workers? That the expectation that 'the market will come back' may be wrong. The roles disappearing, mainly middle-management, support and general development, may not return even when the economy improves. Meanwhile demand for people in chips, infrastructure, security and the ability to actually deploy AI keeps rising. The most honest advice for anyone at a software company today: do not wait for the wave to pass; ask where your role stands relative to tools that already exist, and start moving before someone else decides for you.
