We use the case of Israel to analyze the relationship between ethnonationalist conflict and workplace inequalities, arguing that escalation of ethnic conflict in the political environment induces social closure behaviors within organizations geographically more proximate to the conflict. Combining data from Israeli population registers and the Global Terrorism Database we find that an increase in conflict, measured by non-state political violence occurring within the state of Israel, leads to a decrease in the likelihood of nearby organizations hiring Arab men and women. Importantly, these effects are typically stronger for women and are diminished in organizations that either depend on Arab labor or have a higher density of Arab workers at the top of the organization. Demonstrating that deepening ethnonationalist political conflicts shape workplace inequalities, this paper extends both the theory of racialized organizations and Relational Inequality Theory.