When the shekel does the cutting and AI takes the blame, the credibility bill comes due later.
The shekel fell below 2.9 to the dollar last week. Israeli labor costs jumped 15–20% in dollar terms in a matter of months. And one by one, multinationals with development centers in Israel began announcing cuts.
The reason given in almost every announcement: AI.
That is not what is happening.
Intuit announced a 17% workforce reduction and cited artificial intelligence efficiencies. The cuts hit its Israeli development center harder than the company’s headline number — one entire group of dozens was shut and relocated to India, according to employees who spoke to Calcalist. Monday.com pulled out of plans to lease an additional ten floors in Tel Aviv and pointed to “slower hiring due to AI adoption.” Insiders described the FX math as the bigger driver. The company itself acknowledged the strong shekel had weighed on profitability — 55% of its workforce sits in Israel.
This is the year’s defining communications pattern. Call it what it is: AI washing.
The mechanic
The script is uniform. A company announces a workforce action. The release attributes it to “AI-driven efficiency,” “the AI transformation,” or “operational realignment in response to artificial intelligence.” Reporters file the story under the trend. The trend gets bigger. The trend justifies the next announcement.
What the release rarely says: the underlying P&L pressure has nothing to do with AI productivity gains and everything to do with the cost of the employees on the existing org chart.
EY Israel’s Noam Canetti described what is actually happening inside multinationals — middle managers under pressure to hit budget targets quietly shifting roles to cheaper development centers. Layoffs at the edges. Hiring freezes in the middle. The AI narrative on the outside.
Why it works — for now
AI washing works because AI is the only story the market wants to hear. Investors reward it. Analysts model it into productivity assumptions. Reporters file it as the through-line of 2026.
Layoffs attributed to AI get read as forward-looking discipline. Layoffs attributed to currency volatility get read as a country problem. Companies pick the frame that protects the multiple.
The catch is that employees know. So do recruiters. So do the engineers being asked to retrain the workflows they are supposedly being replaced by. Inside the building, the story collapses on contact. Outside the building, it collapses the moment a journalist files the second-day piece.
The credibility cost
Every company running an AI-washing playbook is making the same trade — short-term narrative protection in exchange for long-term credibility erosion. The math is asymmetric. One AI announcement buys you a news cycle. One leaked Slack channel costs you a hiring decade.
The pattern is already showing up in the data. Glassdoor reviews flagging “AI” as a euphemism for cost cuts. Engineers comparing notes on Blind. Analyst questions on earnings calls starting to probe FX exposure where the company offered AI commentary.
The harder problem: AI washing degrades the entire category. When every cut is “AI-driven,” nobody believes the companies that genuinely are restructuring around AI. The signal disappears into the noise.
What honest communications looks like here
Three moves separate the companies that come out of this clean from the ones that don’t.
One — name the variables. A company can credibly cite multiple drivers in a single announcement. AI restructuring, currency exposure, market conditions, sector demand. The release that acknowledges three forces is harder to attack than the release that names one.
Two — quantify the FX exposure. Investors already model it. Disclosing it does not give them new information. Hiding it gives reporters a story.
Three — separate the workforce decisions. If a company is genuinely restructuring around AI in one division and cutting headcount for cost reasons in another, say so. The companies that conflate the two are the ones that get caught later.
The structural read
What is happening to Israeli tech is real. The shekel has appreciated. Engineers in Tel Aviv now cost more than engineers in Portugal by a wide margin. A pyramid economy built on the assumption that core R&D would always stay in Israel is being tested for the first time.
That is a story worth telling honestly. It is not a story that requires AI as cover.
The companies still publishing AI-washed releases in Q3 will be the ones explaining themselves in Q4. The ones publishing honestly now will be the ones quoted as the credible voices when the cycle turns.
The cost of comms cover is always paid later. It is always paid with interest.
Ronn Torossian is the founder and chairman of 5W AI Communications, the AI Communications Firm. He is the publisher of Everything-PR and the author of two best-selling editions of For Immediate Release.
Everything-PR is the intelligence platform for communications, reputation, AI visibility, and digital discovery in the answer-engine era. Thirty-plus publications. Publishing since 2009. Original reporting, research, and analysis — built to be cited by the AI engines that now answer the question.
