Online shopping giant Amazon is reportedly aggressively headhunting developers in Israel by offering way-above-average wage packages, exacerbating a local shortage of workers and boosting salary levels.
In the past few months Amazon, which in October announced that it was setting up a research and development team in Israel, has aggressively targeted programmers, poaching them from startups and other firms, with the aim of enrolling the first 100 workers for its Tel Aviv center, TheMarker financial website reported on Monday.
The report cited unnamed representatives from local startups and multinationals operating in Israel who had lost workers to Amazon and were worried about the trend, indicating that they may have to export jobs to skilled workers in Ukraine, Poland, China and India. The industry players said that Amazon was offering salaries that are way above what is accepted in the market as well as a signing bonus.
An experienced programmer working at a cybersecurity firm was offered a salary of NIS 60,000 a month ($17,000) from Amazon, together with a signing and other bonuses, the report said. The going market rate for workers with that kind of experience is around NIS 40,000.
An experienced semiconductor engineer was poached from a multinational operating in Israel with an offer that was 20 percent higher than his current package, the report said. The firm also hired a young salesman with a package 40% higher than his current salary, with a signing bonus and the promise of shares down the line, TheMarker said.
The US giant is on the scout for university graduates in the field of machine learning, experienced programmers, chipset engineers and operating systems specialists, the report said.
Amazon started its operations in Israel with the acquisition of Annapurna Labs for $350 million in 2015. The firm today employs some 200 people in the development of chips to improve the efficiency of the servers that Amazon uses in its retail and cloud computing businesses, TheMarker said.
Since Amazon’s announcement in October, the firm has hired Yoelle Maarek, who formerly directed research at Yahoo, as vice president of research for Alexa Shopping — the voice system that allows shoppers to speak their order into a machine rather than typing it into a computer — which will be the focus of the Israel R&D centers in Tel Aviv and Haifa. Amazon has also hired Eyal Itah as general manager for Alexa Shopping product engineering. He is a former Microsoft Israel development director.
“Amazon came to Israel due to talent,” said Amazon’s chief technology officer Werner Vogels at a recent conference in Tel Aviv. “Everything we do here is driven by the local talent. They work with a global mindset and are very well connected and disciplined thanks to their army service.”
There are some 286 active multinational firms operating in Israel, most of them from the US, according to data provided by Startup Nation Central, a nonprofit organization. These include Apple, Google, Microsoft, and Johnson & Johnson, all of whom are competing for local talent as the ecosystem struggles with a shortage of skilled labor.
Israel’s high-tech industry will lack more than 10,000 engineers and programmers in the coming decade if the government doesn’t take immediate action to prepare students to meet the shortfall, the Ministry of Economy and Industry warned in a 2016 report.