What the layoff round at Wix might tell us about the future of Israel (and its tech industry)

Anyone without an ad blocker or a YouTube Premium subscription has, over the past few years, heard the words "I just created this dope website with Wix" roughly three hundred times. Not because people actually say that in real life, but because the originally Israeli website builder buys advertising on the video platform at an industrial pace.

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Because you don't even need to know how to code to build a website with Wix, the platform became enormously popular very quickly after its launch in 2006. After the company went public in 2013, the share price climbed year after year, reaching its absolute peak during the COVID boom of 2021. At that point the stock had risen some 2,000 percent since its IPO and Wix was worth more than 20 billion dollars. Five years later… the company is a shadow of its former self.

Founder Avishai Abrahami announced this week that a fifth of the company's more than 4,000 employees will be let go.

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Thousands of layoffs

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Large layoff rounds are nothing new in the tech sector. The website Layoffs.fyi has been tracking them since 2022, and it's no coincidence that's the starting year. During the pandemic, the entire world went digital: we discovered remote work, bought everything online, binge-watched shows for hours on our favourite streaming platforms. Tech companies hired thousands of people to keep up with demand, but two years later came the hangover. People went back to the office, physical shops survived, and we started spending hours at the pub again.

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In 2022, 165,269 employees were laid off across 1,064 companies; the year after, 264,320. The sector calmed somewhat in the years that followed, but barely five months into 2026 we're already close to matching the total from all of 2025. The key difference? Four years ago companies let people go because financial targets weren't being met. This year, many tech giants are cutting jobs while posting record profits. Amazon is letting go of 16,000 employees; 8,000 people at Meta are being shown the door. These companies say they can get by with fewer people now, thanks to AI.

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"This is not just about adopting new tools — it is about rewiring how companies are built, how they think, how they manage and how they operate. Companies that embrace this change will not only build faster; they will build things the previous generation literally could not have imagined," Abrahami writes in his announcement. But while those extraordinarily profitable companies often use AI as a convenient excuse to trim headcount, other factors are at play at Wix: the company's growth has been slowing for years. The share price is now 85 percent below its level five years ago, and the market cap has shrunk to barely 2.3 billion dollars.

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Falling knife

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The world has changed substantially since Wix launched twenty years ago. Webflow arrived in 2013, followed a year later by the Dutch company Framer. Both tools are far better for building websites — we use them both at Hartstikke — and offer far more than Wix ever did. Two years ago the Swedish company Lovable launched, letting you build simple websites just by writing a prompt. Vibe coding became a thing, and this time the lumbering giant Wix didn't stand still. In June 2025 it acquired fellow Israeli company Base44 for 80 million dollars in cash, with founder Maor Shlomo set to receive a share of future revenues on top of that.

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Investors weren't impressed by the acquisition: the stock has fallen more than 60 percent since that moment. Meanwhile, Lovable keeps charging ahead: the fledgling company is worth more than three times as much as all of Wix put together. Not that Base44 isn't doing well: in May it was tracking 150 million dollars in annualised revenue. But that success comes with a sting for Wix, which had to pay Shlomo 38 million euros in bonuses in the last quarter alone.

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At Wix, the response has largely been to paper over the cracks. Last quarter the company pumped 200 million into marketing and spent 20 million on Super Bowl campaigns. That move is in line with the broader sector: more than a fifth of this year's Super Bowl ads came from AI players. On top of that, Wix authorised a 2 billion dollar share buyback programme in January, hoping to prop up its market value. So far without any visible effect.

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A large part of the problem is another spoiler: the weak dollar. Barely three years ago you got 4 Israeli shekels to the dollar; today it's 2.8. If your customers are mostly American and pay in dollars, but you have thousands of staff to pay in shekels, the math gets harder every month.

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Thousands of jobs gone

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Wix is far from the only company dealing with this. Rapyd, AI21 Labs, Amdocs, and many others are planning layoffs in Israel too. Intel has already quietly reduced its Israeli headcount from 12,000 to 8,000. For plenty of other large tech companies it seems like a matter of time: HP has 6,000 people there, IBM 2,000, and Microsoft, Google, and Nvidia all have sizeable teams.

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Some of those former employees will no doubt start their own companies, and others will land jobs elsewhere in the sector. But broadly speaking, the industry looks set to do more with less in the years ahead, or to shift work away from expensive Israel. In Europe the sector is also feeling the pinch of a weaker dollar, but the internal market here is large enough to absorb much of the impact. If anything, investors are increasingly turning their attention to the European tech scene, and European politicians finally seem intent on pushing through regulation and funding that could give the sector a real boost.

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The shekel, meanwhile, keeps strengthening, and Israeli politicians show little appetite for changing that. The consequences could be severe: the IT sector is a massive driver of the Israeli economy. On the surface, Israel looks like it's doing fine economically. With a GDP per capita of $69,804 it sits roughly level with Western European countries, but once you factor in purchasing power parity, it drops below countries like Slovenia or Latvia. More alarming still: in Israel, 20 percent of the population pays 93 (!) percent of all income tax. Those tend to be the well-paid tech sector profiles who will be receiving their pink slips in the weeks and months ahead. A financially weak Israel will have huge consequences for the region. Anyone trying to read where the Middle East is heading would do well to look beyond the news sites, and keep an eye on Layoffs.fyi too.