“There will be layoffs and cutbacks in high-tech and that is a good thing,” says Viola Ventures co-founder
Shlomo Dovrat, who was speaking at the annual Aaron Institute for Economic Policy Conference at Reichman University, added: “There will be somewhat of a slowdown in growth, sales, and export, but there won’t be unemployment”
“There is a slowdown in high-tech, a slowdown in the auto industry, a slowdown in online advertising, and I’m not sure there isn’t more bad news to come,” said Shlomo Dovrat, Co-founder and General Partner of Viola Ventures, speaking at the annual Aaron Institute for Economic Policy Conference at Reichman University.
Dovrat said he is seeing a real drop in high-tech sales, but added that the crisis also has some positive effects. “Israeli companies have enough money to survive for 12-24 months. But some will have to raise more funds. There will also be layoffs and that is a good thing. Some companies will close and there will be cutbacks, which is also a good thing as this comes after some unhealthy processes. There were companies here that had no products or sales and raised more and more funding rounds without having anything. It will take years to justify the valuations some companies received here over recent years.”
Dovrat noted that the turnover of employees in tech reached problematic levels. “Companies lost an average of 22% of their employees a year and that doesn’t make sense. We experienced the 2001 and 2008 crises, but this crisis is different and there are opportunities for investors,” explained Dovrat. “The advantages provided by tech will only increase. So there will be somewhat of a slowdown in growth, sales, and export, but there won’t be unemployment in tech. We need to continue to be an innovative economy. We can’t find ourselves without human resources and proper infrastructure once more when this crisis ends.”