A strong currency is usually considered a sign of economic success. In Israel today, it is becoming a growing concern for the very industry that helped create it. On Monday, officials from Israel’s Ministry of Finance and Tax Authority held another round of talks with finance executives from the Israeli research centers of global technology giants including Apple, Intel, IBM, HPE, GE Healthcare, and Philips to discuss ways to offset the impact of a surging shekel. The meetings were convened by Karin Mayer Rubinstein, chief executive of the Israel Advanced Technology Industries (IATI) association, just days after Finance Minister Bezalel Smotrich directed his ministry to establish a dedicated task force to address the issue.

The irony is difficult to miss. The technology sector that helped transform Israel into a global innovation powerhouse and attract billions of dollars in foreign investment is now asking the government for help because that success has helped push the shekel to levels not seen in decades.

The problem is rooted in simple math. Most multinational technology companies operating in Israel generate revenue in U.S. dollars but pay their employees in Israeli shekels. As the shekel strengthens against the dollar, every dollar of revenue buys fewer shekels, making Israeli salaries more expensive when measured in dollar terms. Industry representatives told government officials that the real cost of employing Israeli technology workers has risen by approximately 30% since 2021 once exchange-rate changes are factored in.

The shekel recently strengthened to roughly 2.8 shekels per dollar, dipping below the three-shekel mark and reaching its strongest level in approximately 33 years. What appears to be a national economic success story is creating a growing headache for multinational employers deciding where to expand operations and hire workers.

Technology executives warned government officials that Israel is approaching what they describe as a “red line” — the point at which employing an engineer in Israel becomes more expensive than employing similar talent in Silicon Valley and significantly more costly than hiring in competing technology hubs across Europe.

According to industry figures presented during the discussions, an experienced Israeli software engineer now costs employers roughly $170,000 annually, compared with approximately $100,000 for comparable talent in countries such as Portugal. Executives cautioned that if the gap continues to widen, future hiring decisions may increasingly favor other countries.

The stakes are enormous because high-tech remains the backbone of Israel’s economy. According to the Israel Innovation Authority, the sector accounted for approximately 50% of Israel’s exports in 2025, generating billions in tax revenue and supporting hundreds of thousands of jobs.

Signs of strain are already emerging. Website-building company Wix recently announced plans to reduce its workforce by up to 1,000 employees, or roughly 20% of its staff, citing both artificial intelligence and currency-related pressures. Rapyd and Amdocs have also announced workforce reductions. Industry leaders say the larger concern is not necessarily immediate layoffs but future hiring. Companies may keep headquarters and research operations in Israel while expanding engineering teams elsewhere.

Unlike previous meetings, government officials arrived this time with specific proposals. Among the ideas discussed were reductions or deferrals in National Insurance payroll payments, targeted tax incentives, and expanded employee-benefit programs designed to offset higher labor costs.

Officials also discussed allowing large multinational companies to pay taxes directly in U.S. dollars rather than converting funds into shekels. Companies including Google and Nvidia have reportedly requested such flexibility as a way to reduce losses caused by currency fluctuations.

Another proposal under consideration would revive emergency support programs for startups modeled on assistance provided during the COVID-19 pandemic and following the October 2023 war. Some industry representatives have called for at least 1 billion shekels in support measures.

The Bank of Israel has already begun responding. The central bank purchased approximately $801 million in foreign currency during May, marking its first intervention since 2022, in an effort to slow the shekel’s rise. Policymakers also lowered the benchmark interest rate by a quarter-point to 3.75%.

Not everyone believes government intervention is the answer. A stronger shekel reduces the cost of imported goods and has helped bring inflation down to approximately 1.9%. Some investors argue that companies should rely more heavily on currency hedging strategies rather than seeking government relief. Venture capitalist Michael Eisenberg of Aleph has long urged startups to protect themselves against currency fluctuations through financial planning rather than public assistance.

Still, government officials appear increasingly concerned that the issue could affect Israel’s competitiveness. The challenge is finding ways to help employers remain committed to hiring in Israel without distorting markets or undermining the independence of the central bank.

For now, the same industry that helped propel the shekel to its strongest level in more than three decades is warning that success carries consequences. The outcome of these discussions could help determine whether Israel remains one of the world’s most attractive destinations for technology investment—or whether some of its future jobs begin moving elsewhere.

JBizNews Desk — Israel

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