The Disarmament Delusion

Also, Israel's high tech sector in crisis.

The Lebanese Cabinet (@LBpresidency/X)

It’s Wednesday, June 3, and the new "ceasefire" with Hezbollah barely lasted 24 hours before a drone was intercepted over the northern Israeli city of Kiryat Shmona this morning. Based on the deterrence formula Israel announced at the start of this agreement, we should expect retaliatory strikes on Hezbollah strongholds in Dahiya shortly.

This comes a day after another round of talks between the Israeli and Lebanese ambassadors concluded in Washington. The outcome was entirely predictable: the Lebanese spent the time obsessing over the symptoms while desperately avoiding any serious discussion of the disease.

A Lebanese official told Reuters they were proposing a phased approach to perpetuate the ceasefire based on “pilot zones”—specific geographic areas where hostilities would stop, Israeli troops would withdraw, and Lebanese soldiers would deploy, gradually building up to a nationwide truce. It appears the Lebanese have fallen for the same misapprehension common in the West: assuming that the goal of any ceasefire is the ceasefire itself, rather than the objectives of the war it is halting. The objective hasn’t changed and will certainly not be achieved through “pilot zones”: destroy Hezbollah.

This paralysis is not new for the Lebanese government. Despite voting three times to disarm Hezbollah since the summer of 2025, little has actually changed on the ground. The cornerstone of these efforts—the August 2025 “Homeland Shield Plan”—promised to progressively bring all weapons under state control by the end of the year. But, as evidenced by the fact that it is now June, enforcement has remained entirely superficial. While the Lebanese Armed Forces proclaimed the area south of the Litani River clear of Hezbollah infrastructure in January, they deliberately bypassed the group’s massive tunnel networks and drone facilities to avoid confrontation.

This facade is maintained by LAF Commander Gen. Rodolphe Haykal’s extreme risk aversion and Hezbollah’s deep institutional influence over the military; the group has held an effective veto over the army for decades and still maintains critical alliances within it. The breaking point arrived in March when Hezbollah dragged the country back into war. The civilian cabinet formally ordered the LAF to halt the militia’s military operations. Instead, Haykal effectively went rogue, issuing a directive that mirrored Hezbollah’s own rhetoric by prioritizing “national unity” and resisting Israeli aggression over dismantling the group’s infrastructure. Despite numerous calls from the U.S., France, and Saudi Arabia to fire the rogue commander, no disciplinary action has been forthcoming, with the cabinet fearing military mutiny and the perennial ghost of civil war.

Haykal is not Hezbollah’s only friend on the inside. Parliament Speaker Nabih Berri acts as their political enabler, effectively functioning as the organization’s diplomatic wing—it was Berri, after all, who brokered this current ceasefire. Through his political maneuvering, Hezbollah maintains a stranglehold on vital state sectors like the Ministry of Finance and the General Security Directorate. This institutional capture provides the necessary levers to allow $1 billion in Iranian funding to successfully slip through in the past year, while also sustaining the terror group’s flourishing $18 billion shadow economy.

The chasm between Lebanon’s official decrees and the reality on the ground is enormous. While the Lebanese Cabinet issued formal orders in March to hunt down and deport Islamic Revolutionary Guard Corps operatives, the organization has only become more entrenched. To sustain their proxy after Israel decapitated most of its leadership, Iranian forces have essentially assumed direct control of Hezbollah, deploying hundreds of their own officers alongside Syrian and Iraqi fighters to rebuild the shattered militia. Under this direct Iranian command, the strategy is straightforward: ensure Hezbollah’s survival by outright refusing disarmament, exploit the paralysis of the Lebanese state to regain its arsenal, and maintain a baseline of confrontation that prioritizes escalating aggression against domestic Lebanese rivals over full-scale war with Israel.

Beneath yesterday’s diplomatic theater in Washington lies a reality that Lebanon’s international sponsors refuse to confront: the Lebanese state will not dismantle Hezbollah. Beirut simply lacks the institutional will and political spine necessary to reclaim its own sovereignty. But for Israel, incompetence is no longer an acceptable alibi.

If the Lebanese government continues its endless cycle of evasion and delay, the consequences will be kinetic. Southern Lebanon will be leveled, village by village, with its infrastructure reduced to rubble to neutralize the Hezbollah threat. The sooner stakeholders in Paris, Riyadh, and Beirut accept this, the sooner a genuine path to stability can actually be forged.

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View of the Yokneam High-Tech Park. (Michael Giladi/Flash90)

Last week, a brutal reality check hit the Israeli market in the form of high-tech’s “Black Thursday.” Domestic pillars like Wix, Amdocs, and AI21 Labs announced sweeping layoffs, while multinational ZoomInfo abruptly liquidated its entire 300-person Israeli R&D hub in a single stroke.

The broader ecosystem is now facing an aggressive wave of layoffs, organizational restructuring, and capital flight. For the first time in over a decade, domestic R&D employment has actually shrunk, shedding roughly 3,500 highly skilled workers. But why? In 2025, Israeli high-tech output grew by 8.2 percent to 352 billion shekels, contributing a record 18.3 percent to the national GDP. Tech exports hit an all-time high of $85 billion, and capital raising reached a robust $14.6 billion. And yet, the layoffs are coming all the same.

Of those lost jobs, 1,000 came from a single source: Israel’s home-grown tech giant, Wix. CEO Avishai Abrahami blamed the layoffs on “structural pressure on our ability to operate,” pointing specifically to a rapidly appreciating shekel against the U.S. dollar. The macroeconomic math here is unforgiving. Because 79 percent of the sector’s GDP is export-oriented, tech revenues are almost entirely dollar-denominated, while local operational overhead (salaries, rent, and taxes) must be paid in shekels. With the shekel appreciating by more than 20 percent against the dollar in the last year, the actual cost of employing an Israeli engineer artificially skyrocketed by that margin. This major price hike is effectively forcing companies to shed local staff and relocate R&D to cheaper jurisdictions like Eastern Europe or India.

But the exchange rate is far from the only factor. These companies are at the cutting edge of the AI revolution, and their employees are increasingly finding themselves on the wrong side of that blade. Firms are leveraging AI tools to automate their coding, Human Resources, Quality Assurance, and operations—learning to do more with significantly leaner teams. At the same time, companies whose legacy products are threatened by AI are being forced to shed traditional software developers to free up the capital necessary to recruit highly specialized AI architects.

There is also the compounding matter of the reservists. Roughly 48 percent of tech companies have experienced the absence of more than a quarter of their workforce, primarily due to reserve duty. Israel Innovation Authority CEO Dror Bin has publicly noted that a major challenge for the sector is watching “critical people in your work plan disappear.” This disruption is highly quantifiable: it has led to 42 percent of companies reporting significant delays in product development, and an alarming 71 percent reporting disruptions in raising capital.

Through anonymous surveys and reporting in the Israeli financial press, tech executives emphasize that prolonged reserve duty creates critical operational bottlenecks. Furthermore, because multinational boards demand strict efficiency, the unpredictable nature of continuous call-ups increasingly paints the Israeli workforce as a “high-risk” investment. Executives admit that this risk profile is directly accelerating their decisions to offshore R&D jobs to more stable environments in Eastern Europe and the United States.

These are undoubtedly bad signs, but there are positive ones as well, indicating that this is a major restructuring rather than a systemic collapse. While software R&D jobs contracted by 3.5 percent, hardware output jumped by an unprecedented 20.7 percent, with hardware R&D employment up 11.9 percent. The era of massive software development teams is giving way to a leaner, highly specialized focus on bespoke tech, semiconductors, and AI hardware.

While the geopolitical strain and the wave of layoffs are painful, immediate realities, the explosive surge in hardware output indicates that global demand for Israel’s core engineering prowess remains fiercely intact. It is a painful evolution, but what my friend Dan Senor famously called the “Start-Up Nation” will likely remain so for years to come.

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English Editor: Ari Tatarka

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