As software engineers in Ukraine struggle to keep on coding, IT industry experts say foreign tech firms could be forced to shift operations if the conflict drags on
- Ukraine tech sector was booming before Russia invaded
- Foreign firms send aid, set up ad hoc hubs for workers
- But companies may seek staff elsewhere if war drags on
By Avi Asher-Schapiro
March 31 (Thomson Reuters Foundation) - A dispute involving a U.S. fintech company and a group of sacked Ukrainian software engineers highlights the difficulties a prolonged war in Ukraine could pose to the country's hefty IT sector and its almost 300,000 workers.
Three weeks after Russia invaded, software engineer Alex Zaichenko said the eight members of his quality assurance team were told by their IT-outsourcing firm that its client, Alchemy Technologies, no longer needed their services.
Zaichenko, who had packed up his car and fled shelling in Kyiv for the western city of Lviv in late February, said he was angry that California-headquartered Alchemy had left workers in Ukraine without an income in their hour of need.
"No one should behave this way," Zaichenko told the Thomson Reuters Foundation, adding that when his team was dissolved, the workers were told the decision was due to the "current situation in the world".
Alchemy Chief Executive Timothy Li, responding to a request for comment, said the team's layoff had "nothing to do with the backdrop of what's happening" and was linked to "a case of violation of corporate policy".
"Because of the evidence uncovered during our initial investigation, we've decided to part ways with that portion of our team," Li added in emailed remarks, without giving further details.
Zaichenko, and another sacked QA engineer - who asked not to be named - said they had not been informed of any investigation.
A number of foreign tech companies have announced efforts to assist their beleaguered Ukrainian workers since Russia invaded on Feb. 24, and Li said Alchemy has been sending cash aid to help its remaining workforce in Ukraine.
Scott Sturges, founder of U.S.-based 3D Source, said 50 of his workers and their families had been relocated to a mountain resort in a western region. He has also urged Ukraine's government to grant some exceptions from registering for conscription for IT workers.
"They're such an important part of the Ukrainian economy," Sturges said, adding that he was in talks to establish a dedicated zone in western Ukraine to help nurture the IT industry in the long term.
'WORK ON THE HOME FRONT'
But despite such efforts to support workers, multinational tech companies are likely to consider pulling out of Ukraine if the conflict drags on, industry experts said.
"They are keen to support staff in the short term, but can they do that for three, six or 12 months? No," said David Groombridge, a vice president at market research firm Gartner.
"There will be a point where they have to shift these services to other locations to ensure their own customers are not impacted," he said.
That would deal a heavy blow to tech workers and the economy of Ukraine, where multinational IT outsourcing firms have offices, and foreign firms have set up shop to take advantage of the relatively cheap, high-level talent.
A 2019 report by trade group the IT Ukraine Association estimated the sector to be valued at about $6.8 billion last year - more than 10% of the country's total exports, with global firms like Apple and Google among those tapping its developers.
But most IT workers in Ukraine are considered self-employed, which makes it hard to dispute dismissals, said George Sandul, a lawyer at Kyiv-based workers' rights group Labor Initiatives.
Even those who are formally employed might face challenges as the conflict is drawn out.
Ukraine passed a new law this month making it easier for firms to dismiss or suspend employees while martial law is in force, said Sandul, calling instead for stronger protections for Ukrainians who "work on the home front".
'TURNED UPSIDE DOWN'
For outsourcing companies, any disruption to normal operations is a major headache that can cost them business.
One employee of Pennsylvania-headquartered outsourcing giant EPAM Systems, who spoke on condition of anonymity, said the U.S.-based client he had been working for had taken his Ukraine-based team off the account and gone instead to Belarus.
EPAM Systems confirmed it had taken some Ukrainian staff off their accounts, but said it continued to pay them. It has also pledged $100 million to aid its 14,000 employees in Ukraine.
"Our key priorities continue to be protecting our people who have been impacted by the events in the Ukraine region and providing uninterrupted service for our global customers," an EPAM spokesperson said.
The war, which Russia calls a "special operation" to demilitarise Ukraine, has already upended engineers' working life, from shaky internet connections to exhaustion and being forced to relocate.
"Their lives have been completely turned upside down: they've had to leave their homes, people have fled as far west as they can go," said Mark Beare, vice president of engineering for U.S.-based Digital Trends website.
His nine-person team has moved into a house near the Slovenian border, rented by their outsourcing firm Source Angel.
Some tech workers said they had felt pressured to work by their employers, even when it was untenable.
"I have to work, if possible, ideally the whole day, but since I have problems with the internet, or other problems, it is difficult," said Evgenii, an outsourced engineer working for NIX Solutions near the heavily bombed eastern city of Kharkiv.
Last month, the company's founder Igor Braginsky sent an email to staff saying: "We will only work with those who really work," adding that he would "say goodbye" in the coming week to those who did not deliver.
Braginsky said some employees had misinterpreted the email, adding that he had simply intended to encourage staff to inform their managers if they were unable to work.
"If you are unable to work, no problem, let us know, so we can make substitution," he said, adding that he had donated some of his own money to support his more than 2,500 employees in Ukraine, and that nobody had been fired.
Given strong demand for IT talent globally, Ukrainian developers will not struggle to find jobs over the long term, Groombridge said.
For some, work is a welcome distraction from war.
"It's particularly difficult to focus on coding now," said Maksym Laphshyn, an engineer with outsourcing firm SoftServe who is coding for a U.S. firm in the renewable energy sector.
"But since I'm not a soldier ... it's something I can do," he said.
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(Reporting by Avi Asher-Schapiro @AASchapiro in Los Angeles; Additional reporting by Umberto Bacchi in Tbilisi; Editing by Helen Popper. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)
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