With the outbreak of the war in Ukraine, the European IT market is facing its second crisis in a short period of time, after the global IT industry was hit particularly hard by the coronavirus pandemic, which has seen the price of chips skyrocket and labour shortages arise.
Since the outbreak of the Russo-Ukrainian conflict in Ukraine, the IT sector has virtually ground to a halt. Signs of this are already being felt in the markets of other countries on the continent, but the impact of the sanctions will also have a significant impact on the operations of global companies with units in Russia.
"Eastern European countries such as Ukraine and Belarus have traditionally been the most popular nearshoring locations for many companies operating in the EU. This has meant that, in addition to their optimal geographical proximity, they have been able to efficiently operate the IT services they have deployed there with a highly skilled workforce.
This process now seems to be changing.
Belarus, of the two countries, has been hit by economic sanctions for more than a year, which have restricted its ability to serve the IT services supply market more than in previous years. Therefore, the shutdown due to the conflict in Ukraine is even more sensitive to the already supply-constrained and labour shortage IT industry, which is recovering from the effects of COVID"
says Péter Borzák, CEO of INSPYRE Informatics.
The Russo-Ukrainian war is therefore expected to increase labour shortages in the sector, while at the same time increasing the cost of development and services. This will be particularly noticeable for projects that require specific skills or have tight deadlines.At the same time, like almost all economic players, large tech companies are trying to isolate Russia as much as possible in the field of computing, but the sanctions imposed will not only affect Russian companies and organizations.
Companies that have significant Russian offices or business connections have already lost much of their stock market value, and the withdrawal of their services and the liquidation of local units will also impose further economic and labor market challenges.Companies that have taken preventive measures are in a better position. Even before the conflict erupted, many companies sought to relocate their IT departments in Ukraine to the safer western part of the country or to neighboring NATO countries, protecting their workers and ensuring the continuity of their operations.
Even so, thousands of developers were forced to leave their jobs as a result of the war, and many of the IT professionals who remained in the country have since been serving in the defense forces.
"The long-term impact of the conflict on the IT sector is difficult to predict at this stage, but Ukrainian developers who have lost their jobs are already being welcomed by tech companies across Europe, who are opening up remote positions. As a domestically-based IT services company, we wanted to step in and launched a campaign to help IT professionals working in Ukraine.
With the #solidarITy campaign, we are trying to provide Ukrainian developers with a stable livelihood during the war by offering remote jobs."
says Péter Borzák, CEO.