The bad news is, another wave of dismissals has swept through the Israeli tech scene. More than 2,000 people were thrown out from the local mammoths such as Comverse Technology (TASE: CMVT) and Cellcom, from startups such as Mellanox, and from hi-tech notables such ECI Telecom (Nasdaq: ECIL) and Gilat Satellite Networks (TASE: GILTF) .

Unlike the previous waves of cutbacks, this one surprised nobody. For most of the companies involved, this is the second or third round of layoffs.

The even worse news is that this isn't the last wave. The trend in most sectors is clear: business is getting worse, investment are down and spending is being slashed practically across the board.

There are three key causes behind the job cuts:

• The global hi-tech crisis. Each Israeli company handing out pink slips has its own story managerial flaws, bad bets on the wrong markets, dependence on a single product, the collapse of a major customer. But almost every Israeli hi-tech failure has its match in Europe and the States. The dismissals savaging the hi-tech industry aren't an Israeli story, they're global, and the hardest-hit are the global communications companies.

The main difference between Israel and the rest of the world is that the local startup industry grew so much during the boom years, that it achieved critical weight in our economic activity. When the venture capital bubble burst, Israel's pain was keener.

Ending the crisis and creating jobs depends first and foremost on a recovery by the global communications and tech markets. But that rally will be long and slow.

• The intifada. The terrorism, and war in the territories, have ravaged almost every business sector. They have strangled investment, depressed private consumption, inflated the government's deficit and lifted interest rates. Tens of thousands of jobs have been lost in the tourism and construction industries, in trade and in industry.

The mood of the business sector hasn't been this sour in a decade, and thousands more are likely to lose their jobs as the year wears on.

• And, the government, which chose to ignore the warning sirens shrieking for a year and a half now. The bloating deficit exacerbated the recession, increased the instability, and led to higher taxes. Instead of diverting resources to relieving the groaning private sector, the government increased the burden by raising taxes and interest rates.

In recent months the prime minister and finance minister have been forced to accept the discipline of the markets, and submit a saner budget that aims to restore discipline, and the trend of reducing the deficit. The foreign currency market settled down and stability was restored in the financial markets.

But it will prove to be a lull, not a change: if the government shrugs off its budget cut, the markets will be destabilized again and the economy will resume its march toward crisis.

The question is, will the government be forced to bow to the discipline not only of the capital market, but of the job market too? If joblessness continues to balloon, it may become a key parameter in the government's survival, and in determining the next prime minister.

Migdal Insurance (TASE: MGDL )

Dor Chemicals (TASE: DORC )