Ukrainian IT businesses under quarantine: 50% lose clients, 20% cut salaries

The IT recruiting agency INDIGO Tech Recruiters and the lawyer Leonid Viktorov have interviewed 32 Ukrainian tech companies to learn how the quarantine has affected their business and what measures they take to minimize the consequences.

The respondents’ replies suggest that most tech market participants are preparing for a drop in demand and planning to optimize their business. Not everyone will be able to avoid such unpopular measures as layoffs and salary cuts.

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Respondents

Mainly, the respondents of the survey were medium-sized outsourcing companies (with less than 100 employees) and international product companies. Large outsourcing companies and Ukrainian product companies account for the remaining third.

After the quarantine was announced, most of the office teams began working remotely: almost 80% of the respondents transferred all their staff to telework. Just 3% continue working from the office.

Anti-crisis measures

• 51.6% do not announce new job openings,
• 45.2% cut office rent expenses,
• 38.7% save on team development (training, team building),
• 35.5% plan to save on salaries,
• 22.6% save on marketing,
• 9.3% work as usual, not yet decided on their action plan and would navigate the situation as it develops.

Among other measures are transitioning to online training, sales intensification, and even the strengthening of the team with new skilled professionals.

Layoffs, dismissals, salaries

Most of the companies do not plan to part with their teams. Just 15% intend to reduce staff.

Moreover, the majority of companies (72%) do not consider the option to put their employees on unpaid leave. Such measures will be taken just by 12% of the respondents.

Pay cuts

More than half of the interviewed companies are not going to reduce their employees’ salaries. On the other hand, 22% of the respondents said they would cut staff remuneration. A further 25% took a wait-and-see approach.

Besides, 3% of the respondents said they would reconsider their employees’ salaries set in foreign currency, against the backdrop of its appreciation.

Customer attrition and drops in income

The new situation pushes companies to revise their terms of business. It turns out that almost half of the companies will negotiate new terms, for example concerning discounts and other fees.

Companies are forced to give up many projects, including those related to IT services. Most of the respondents either have already lost some customers or predict this.

The situation in sales is similar: the majority of the companies either already acknowledge or anticipate a downturn.