Up to 25% of employees of major Ukrainian IT companies work from abroad - survey

MOSCOW. March 7 (Interfax) - The number of employees in the 50 largest IT companies in Ukraine decreased by 5.3% to 92,400 from August 2022 to January 2023 due to relocation to their companies' foreign offices and legalization abroad, Ukrainian media said with reference to a survey published on the DOU website on Monday.

Most of said companies keep up to 25% of their Ukrainian teams abroad, it found.

"As the companies explained, with some exceptions, the reduction doesn't mean that the number of specialists in a given company has actually shrunk. IT specialists have moved abroad to work at other offices of their companies, have gotten legalized there, and stopped paying taxes in Ukraine," it said.

Before the crisis, 50 largest IT companies in Ukraine employed 100,300 people in January 2022, compared to 76,300 in January 2021.

Such companies have started actively legalizing precisely technical specialists abroad, the survey found. While the number of technical specialists remained roughly unchanged in H1 2022, it decreased by 4,600 in H2 2022. The overall number of technical specialists in the top-25 IT companies in Ukraine declined to 57,900 in January 2023 from 62,500 in January 2022.

The top-five IT companies in Ukraine (Epam Ukraine, SoftServe, GlobalLogic Ukraine, EVOPLAY, Luxoft) saw the number of their specialists decrease by 3,300 in the second half of 2022, the survey found.

In particular, Epam Ukraine, which is ranked first in DOU's ranking, had the number of its working specialists shrunk by 1,260 in H1 2022 and by another 1,225 in H2 2022 to the current 11,375 employees still working in Ukraine or continuing to pay taxes in Ukraine even while working from abroad. The number of the company's technical specialists has shrunk by 9% to 10,400. Some of the company's specialists have left Ukraine. EPAM has relatively few open vacancies now, as it normally covers its demand for specialists through internal recruitment, it said.

The workforce of SoftServe (second in the ranking) declined by 164 people in H1 2022 and by another 1,468 in H2 2022 to 9,450. The number of its technical specialists declined by 22% to 7,393, also chiefly due to relocation, as about 2,000 specialists of SoftServe have moved abroad during the crisis. Some of them have returned now, but many still remain abroad and getting legalized at the other locations where the company is present. According to DOU, the company is also somewhat optimizing its workforce, but this process is not sweeping.

GlobalLogic Ukraine (ranked third), which kept increasing its staff in H1 2022, saw a decline by 444 employees in H2 2022, with the number of its technical specialists having decreased by 7% to 6,467. "The reason is the same: most specialists have moved to other offices of the company worldwide. Internal polls in GlobalLogic show that over 70% of them plan to return to Ukraine with the end of the crisis," the report says.

GlobalLogic has the largest number of open vacancies (585 as of early February) in the EMEA region (Europe, the Middle East, and Africa).

EVOPLAY has increased its workforce by 253 employees, motivating this by expanding the existing projects and launching new ones. Luxoft explained the reduction of its staff by 200 specialists by their legalization at other locations.

According to DOU, Ukrainian IT companies are actively opening new offices abroad, including four in Colombia, three in India, two in Argentina, and one in Mexico, Uruguay, Peru, and Brazil each. New offices have also been opened in Poland, Romania, and Spain.

Fewer offices were opened in Ukraine, but at least 27 companies still did it in H2 2022. Poltava saw the largest number of new offices of IT companies (5). New offices have also been opened in Odessa, Kiev, Kharkov, Lvov, Cherkassy, Kropivnitsky, Uzhgorod, Ternopol, Ivano-Frankovsk, and Chernovtsy. In addition, Playrix has reopened its office in Kharkov.

While companies actively closed their offices in Ukrainian cities in H1 (a total of 32 such offices were closed in that period), this process almost stopped in H2 (only one office was closed). Intellias suspended the operations of its office in Kharkov but is planning to reopen it when the situation improves, the report says.

The survey found that the number of IT specialists in Kharkov has declined because of the crisis by about 11,000 to 2,837 (15 companies), compared to 2021. At the same time, the number of such employees has grown by 10,000 to 21,773 in Kiev (44 companies) and by 1,000 to 15,191 in Lvov (31 companies).