JERUSALEM (XINHUA) – About 68 per cent of start-up companies in Israel’s high-tech sector have taken actions to transfer operations and cash abroad and cut costs considering the uncertainty posed by the judicial reform process, according to a survey published on Sunday.
The survey, carried out by Israeli non-profit organization Start-Up Nation Central (SNC), aimed to understand the implications and the hi-tech industry’s expectations for the future regarding the controversial reform and the civil unrest that Israel has experienced over the last six months.
The survey, which included 734 start-up founders and CEOs alongside managing directors of venture capital funds, found that 22 per cent of the start-up companies have moved cash reserves outside Israel, while another 31 per cent intend to do so.
In addition, eight per cent of the companies have begun the process of moving headquarters locations outside Israel, while 29 per cent reported their intention to do so in the near future.
The survey report noted that 19 per cent of the companies laid off employees, and 28 per cent fired more than 30 per cent of their workforce.
Also, 37 per cent of investors who participated in the survey said companies in their portfolios have withdrawn some of their cash reserves and moved them abroad, while 89 per cent reported that companies in their portfolios started changing their headquarters location or intend to do so.
SNC CEO Avi Hasson said the behaviour by companies and investors has increased significantly over the past three months, adding trends like registering a company abroad or launching new start-ups outside Israel will be hard to reverse.
